Homework and Hypotheses for Tuesday 12/21
December 20 RTH Session
ES opened at 1243.25 out of range, tested up one tick then was an opening drive down to 1236.25 with responsive selling back to the previous days range. It pushed to new highs and CLVN 1245.75 where it had a double top and dropped down to 1241 at end of session. This was a neutral day extreme since both IBH 1243.50 and IBL 1237.50 were broken. I'm not sure of the new stats, but this has about a 16% chance of occurring and has happened 2 days in a row. Usually, one side is defeated and continuation is likely the next day. I'm not sure who was defeated. However, ES ended up right under where it opened and at the top of the Friday Profile. This being the case I would expect a continuation up tomorrow. The profile shows vertical development with double distribution. The upper portion had VPOC at 1242.50 and the lower smaller distribution had a HVN at 1238.50. Stats show that both balance areas are normally visited within the next three sessions.
The long term composite for the past 7 days shows good testing between 1227.25 and 1245.75. Areas at the top and bottom of this range are CLVN's from the long term composite. The 1236 CLVN held up today, while the 1245.75 CLVN was tagged today. Levels above are another CLVN at 1247.50, 1248-1249 CHVN area, 1252.50 CLVN and 1254.25 CHVN. I would expect a slowdown in the 1248-1249 area, but ES is so close to taking out the 1252.75 CLVN, that I would not be surprised if it pulls it off during the low volume this week. I now think it won't stop until it hits the CHVN above at 1254.25 but I am not trading that until we are in the area. My hypothesis for weeks when asking what is the market trying to do and how good a job is it doing it has been that it is trying to take out 1252.75 and it is doing a good job knocking out levels as it moves up. To the downside if ES breaks below 1228, then 1224.75 NVPOC, and 1220.50 NVPOC are magnets. Extended range below is 1218.25, then a floor at 1211.50 over the next few days. VPOC for the last 7 sessions is at 1238.75.
Areas of interest above and below from the long term composite are 1254.75 CHVN, 1252.50 CLVN, 1245.75 CLVN, 1243.25 CHVN, 1241.25 CLVN, 1238.75 CHVN, 1235.75 CLVN, 1233 CHVN, 1228.50 CLVN, 1222.25 CHVN, 1220.75 NVPOC, 1218.25 CHVN, 1216.50 CHLVN, 1215.50 CHVN, 1213.50 NVPOC, 1211.75 CHLVN.
From the previous RTH nodes exist at 1242.50 and 1238.50 (which is right at the last 7 sessions VPOC)
Economic Events for the day consist of two reports before the open ICSC Store sales at 7:45 am and Redbook at 8:55 am. These have a potential to move ES pre-market.
Hypotheses at 12:25 am 12/21
1) If ES opens in range, but over 1242.50 Previous Day VPOC I will look to buy dips. Areas of interest are 1237.50-1238.50, 1241.25, 1242.50, 1245.50. Any of these areas will be looked at to buy as well as scale depending on where I got in.
2)If ES opens out of range above 1245.75 I will also look to buy dips as Hypothesis #1. However, if it gaps up 5-10 points I will look to sell at 1254.25 or 1252.50 trying for a partial gap fill first.
3) If ES opens in range, but closer to 1238.50, I will look to sell rallies. 1242.50 will be an area of interest for selling if ES opens below.
4) If ES opens out of range with a gap down I will also be looking to sell rallies, but may go long if unfair price pushes way below previous day VPOC as I look for a partial gap fill. As I mentioned yesterday if ES breaks below 1228 then 1224.75 NVPOC and 1220.50 NVPOC are magnets. Extended range below is 1218.25, then a floor at 1211.50 over the next few days.
5) UPDATE AT 6:26 AM O/N high was 1247.50. ES is now at 1246.50. O/N VPOC is 1245.75 and P shaped profile. Depending on how ES opens I will be looking for a gap fill. However, I will keep an eye out for an opening drive up if 1244.75 does not break.
The long term composite for the past 7 days shows good testing between 1227.25 and 1245.75. Areas at the top and bottom of this range are CLVN's from the long term composite. The 1236 CLVN held up today, while the 1245.75 CLVN was tagged today. Levels above are another CLVN at 1247.50, 1248-1249 CHVN area, 1252.50 CLVN and 1254.25 CHVN. I would expect a slowdown in the 1248-1249 area, but ES is so close to taking out the 1252.75 CLVN, that I would not be surprised if it pulls it off during the low volume this week. I now think it won't stop until it hits the CHVN above at 1254.25 but I am not trading that until we are in the area. My hypothesis for weeks when asking what is the market trying to do and how good a job is it doing it has been that it is trying to take out 1252.75 and it is doing a good job knocking out levels as it moves up. To the downside if ES breaks below 1228, then 1224.75 NVPOC, and 1220.50 NVPOC are magnets. Extended range below is 1218.25, then a floor at 1211.50 over the next few days. VPOC for the last 7 sessions is at 1238.75.
Areas of interest above and below from the long term composite are 1254.75 CHVN, 1252.50 CLVN, 1245.75 CLVN, 1243.25 CHVN, 1241.25 CLVN, 1238.75 CHVN, 1235.75 CLVN, 1233 CHVN, 1228.50 CLVN, 1222.25 CHVN, 1220.75 NVPOC, 1218.25 CHVN, 1216.50 CHLVN, 1215.50 CHVN, 1213.50 NVPOC, 1211.75 CHLVN.
From the previous RTH nodes exist at 1242.50 and 1238.50 (which is right at the last 7 sessions VPOC)
Economic Events for the day consist of two reports before the open ICSC Store sales at 7:45 am and Redbook at 8:55 am. These have a potential to move ES pre-market.
Hypotheses at 12:25 am 12/21
1) If ES opens in range, but over 1242.50 Previous Day VPOC I will look to buy dips. Areas of interest are 1237.50-1238.50, 1241.25, 1242.50, 1245.50. Any of these areas will be looked at to buy as well as scale depending on where I got in.
2)If ES opens out of range above 1245.75 I will also look to buy dips as Hypothesis #1. However, if it gaps up 5-10 points I will look to sell at 1254.25 or 1252.50 trying for a partial gap fill first.
3) If ES opens in range, but closer to 1238.50, I will look to sell rallies. 1242.50 will be an area of interest for selling if ES opens below.
4) If ES opens out of range with a gap down I will also be looking to sell rallies, but may go long if unfair price pushes way below previous day VPOC as I look for a partial gap fill. As I mentioned yesterday if ES breaks below 1228 then 1224.75 NVPOC and 1220.50 NVPOC are magnets. Extended range below is 1218.25, then a floor at 1211.50 over the next few days.
5) UPDATE AT 6:26 AM O/N high was 1247.50. ES is now at 1246.50. O/N VPOC is 1245.75 and P shaped profile. Depending on how ES opens I will be looking for a gap fill. However, I will keep an eye out for an opening drive up if 1244.75 does not break.
how the day is going
8:55 am pt Es opened at 1246.25 and tested down to 1245.25. I was too busy looking for the gap fill and ignored the open test drive although I thought about it minutes before the open. So I shorted 50% at 1246.75/1247 for 1 point scaling both when it looked like 1245 was holding. This is where I was not quick enough to switch back to hypothesis #1 and the 1245.50 range for going long. It is currently at the 1248.25 HVN, which could give it some upward rotation. At the moment I am on the sidelines. If 1252.50 is close I may short. Kids are off school today and not much activity, so I will probably focus on them and not the ES.
Update: I shorted 50% at 1249.50, but scratched as I felt it was a boredom trade. This was not even in my plan or levels looking at for the day (except near High of Day for a while), so I scratched after a few minutes to stick to plan. I should have controlled my Monkey and not even made this trade.
Update: I shorted 50% at 1249.50, but scratched as I felt it was a boredom trade. This was not even in my plan or levels looking at for the day (except near High of Day for a while), so I scratched after a few minutes to stick to plan. I should have controlled my Monkey and not even made this trade.