Review and Preparation ESH4 January 20th-24th, 2014

Notes: Post market close, Thursday.

  • The first chart below shows the daily bars for ESH4 at the end of trading on Thursday.  Thursday was a big down day. From the open of the RTH session price in ES moved down.  Late in the day,  starting around 2pm price rallied up.
  • Before the late rally up, the daily bar set new lows for the week and it closed below the earlier low from Tuesday.  The low of Tuesday has been violated and broken with Thursday closing below it.
  • However, the low was at an earlier support level just above 1811, which is just above previous resistance now support and the 38% of the most recent impulse up leg.
  • If the 38 fib cannot hold look for support at previous resistance at 1806 or lower to the 50% fib at 1800.
  • The interim support level, at around 1830, that held for 7 + trading days was also broken as the day closed below it.
  • Careful with rallies above 1830 as a new high above 1846 would have to be established to confirm a up trend continuation, though a down trend has not been confirmed.

Preparing for the Thursday RTH open

  • Over night session was down, look for the big 5 minute volume bar within the first 30 minutes to 1  hour of RTH open, that should give an indication toward direction.
  • Support is around 1826, but if price get there then the interim support would be violated maybe look for lower support at 1817 and even down to 1810 though 1810 would be a big move down for one day.
  • Overnight volume was 280,000 and price was sharply down off strong resistance area, look for short trades.

Reviewing up to the end of Tuesday Jan 21st trading day in preparation for Wednesday trading

Review and observation before RTH open Wednesday:

  • Overnight high 1841.25 which happened at around 12:00 am.  The overnight low 1834.75 around 6 am.  Volume was 171,000

Review and observation after Tuesday’s close:

  • The open of RTH at 9:30am EST started a down move about 16 points down.  Support was found near Friday and Monday’s low about 1827.
  • From the low price moved back up sharply up almost 13 points and closed the daily bar white and up.
  • If the interim support around 1828 get broken look for 1809 to possibly be next area of support.  However, do keep in mind 1809 was a new low breaking previous interim support last week.
  • Watch for reaction off the resistance area between 1841 to about 1846.  If price get above here wait for the daily bar to close for full confirmation of a possible move further up.  1852 is a 1.618 fib extension level, may be resistance with possible sellers there?

Monday is a holiday in the US so expect the markets to be inactive with little to no volume.

With little going on Monday, here is a quick look back at the 2013 on the weekly chart.

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ESH4 Level’s for January 13th – 17th, 2014

What to look for next week (Jan 20th-24th):

Look at price behaviour near the interim support area of about 1829 and resistance near 1845 or so.  Insights can be gained at these support and resistance level.  If price moves to one and it holds look for it to move to the other.  If one gets broken look for continuation.  Monday will be a holiday in US.

Notes to finish off the week Jan 13th – 17th:

  • The last trading day of 2013 was Tues Dec 31st and the high for the year and the all time high was set then at 1846.50.  Since then, price on the S&P E-mini has found balance.
  • To open the new year price moved down from the high down trading as lows as 1809.50.  On Monday Price moved sharply down closing below the previous weeks low breaking interim structure.  Then Tuesday and Wednesday were up days taking out Monday high.
  • To close the week Thursday and Friday moved sideways finding resistance near Wednesdays high near 1843 well above Monday and Tuesday’s low around the 1813 area.

Preparing for Friday Jan 17th

Preparing for Thursday Jan 16th

Reviewing daily chart from what happened so far for the week and what may happen today

  • Wednesday’s price continued rallying up.  There was little to no down pressure as price opened and moved mostly up.
  • However, the close was below last weeks high.
  • 1842 to about 1847 might be resistance area, do not long in this area.  If do be careful with stops.
  • Volume point of control (high value area) is about 1831.50, this could be a support level, careful with trading in this area.

Review 1-hour chart from Wednesday in preparation for Thursday

  • Previous day’s high (PDH) is 1845.75 and previous day’s low (PDL) 1831.50 Yesterday (Wed) set a new high for the week at 1845.75
  • Note Monday’s high (Mo H) is 1838.25, may either serve at support or resistance.

Preparing for Wednesday Jan 15th

Daily chart notes

  • Building from Monday which closed below last weeks lows, Tuesday’s price bar found support at Mondays close and then rallied up, but did not make it up to Monday’s high.
  • Be careful of Tuesday’s up day, it was an inside up bar day.  It did not reach Monday’s low or high.
  • Look for resistance at 1840 and then up to 1847 last week (and the all time) high.
  • The support area is around 1811.25 which is the 38.2% Fibonacci retracement of the most recent impulse leg.
  • Note the bigger up impulse leg has a 38.2% retrace level at 1802.50
  • Tuesday up move was on volume of 1.37m during the RTH session.  Monday’s down move was on 1.56m volume during RTH.
  • Tuesday’s up move started around 3am EST, but really moved from the 9:30am EST open.  The 10am bar just opened and moved up, it had no down wick.

1-hour chart notes

  • Overnight action continued the rally up.  On the RTH open price moved up to Mondays high. do not short on highs until it is taken out.
  • Previous days high (PDH) is 1834.25, possible support.  8am hour bounced off it.
  • Overnight volume was 170,000 about normal.  Tuesday’s RTH volume was 1.37m, normal.

Preparing for Tuesday Jan 14th

  • Posting chart late, after market opened and Euro session closed.
  • On Monday Jan 13th, price on the ES touched the 38.2% fib retracement level of the most recent up impulse leg and then closed above the 38.2 level
  • However, the close was below the low from last week, suggesting a break of last weeks support
  • Until the 38.2% level is broken at or around this level I should look for long trades
  • Look for resistance around  Thursday and Friday’s lows

The purpose of these posts and chart images is to help me develop and strengthen my pre and post market review and preparation for the upcoming trading day.  It should also serve to help me better understand the market and guide me to see and know the nuances.  I believe if I make this a habit it will only help me become a better trader.

If I take the time to update these charts for the blog then it provides accountability for me to correctly identify levels on my working charts.