HOMEWORK AND HYPOTHESES FOR WEDNESDAY DECEMBER 22
DECEMBER 21 RTH SESSION
Previous RTH Session opened 1246.25, tested 1245.25 and it was off to the races (if you can say that on a 6 point day!). The low was just inside yesterday's range (which was rejected) and the 1245.75 CLVN. I'm classifying this as an Open Auction Out of Range/Open Test Drive. IBH was 1248.75 and IBL 1245.25. VPOC for the day was 1249.25. The 1247.50 CLVN was taken out during RTH. ES barely moved at 1249.25 area, but built up acceptance for a push that never completely made it to the 1252.50 CLVN, stopping at 1251.25 and settling at 1250.75 for the day. The profile for the day looks really balanced in it's tight 6 point range.
The long term composite for the past 8 days shows good testing between 1227.25 and 1251.25. Areas at the top and bottom of this range are still CLVN's from the long term composite. The 1245.75 CLVN held up today, while the 1247.50 CLVN was tagged and almost nailed the 1252.50 CLVN. My hypothesis for weeks has been that the market is trying to take out 1252.50 and it has almost done it. In the morning it's possible there is a test to 1252.50 or 1254.25 CHVN. To the upside there are not alot of levels to take out. It seems like a free ride to 1268.25, but I will need to pull up specific days that traded in the area before I think this way. To the downside if ES breaks below 1245.25 CLVN/Previous day range then 1241.75 may be the next stop down. This 1241.75 area could be the next "support" area if ES is going to continue higher. If 1241.75 fails it is back in Monday's range and the preceding 6 days. Levels in this area are 1238.75, 1235.75, 1233.25 and 1228.50. If 1228.50 breaks (and I don't look at this for tomorrow it's more long term) then 1224.75 NVPOC, and 1220.50 NVPOC are magnets.
Areas of interest above and below from the long term composite are 1268.25, CLVN, 1254.25 CHVN, 1252.50 CLVN, 1248.25 CHVN, 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.
Hypotheses for Wednesday
1) Possibly a slight continuation up as an Open Rejection Reverse tagging 1252.50 or 1254.25. I will look for this if ES opens over VPOC but does not test 1249.25 VPOC right away. Depending on how well defended I will be looking to short at these areas.
2) Open Test Drive where it opens above VPOC and tests 1249.25 then moves up over 1252.50 and 1254.25 and above. If it tests lower and defends 1247.50 I may also look to go long. This is an HVN on the previous RTH session. The line in the sand for me is 1245.75 CLVN. If ES dips that low and is defended I may look to continue going long.
3) If ES gaps down several points under VPOC I may look to go short on rallies. Levels I am eying are 1250.25, 1249.50 VPOC, 1248.25 and 1247.50, 1245.25.
Possibly more hypotheses in the am after GLOBEX. I will not be trading much Wednesday.
The long term composite for the past 8 days shows good testing between 1227.25 and 1251.25. Areas at the top and bottom of this range are still CLVN's from the long term composite. The 1245.75 CLVN held up today, while the 1247.50 CLVN was tagged and almost nailed the 1252.50 CLVN. My hypothesis for weeks has been that the market is trying to take out 1252.50 and it has almost done it. In the morning it's possible there is a test to 1252.50 or 1254.25 CHVN. To the upside there are not alot of levels to take out. It seems like a free ride to 1268.25, but I will need to pull up specific days that traded in the area before I think this way. To the downside if ES breaks below 1245.25 CLVN/Previous day range then 1241.75 may be the next stop down. This 1241.75 area could be the next "support" area if ES is going to continue higher. If 1241.75 fails it is back in Monday's range and the preceding 6 days. Levels in this area are 1238.75, 1235.75, 1233.25 and 1228.50. If 1228.50 breaks (and I don't look at this for tomorrow it's more long term) then 1224.75 NVPOC, and 1220.50 NVPOC are magnets.
Areas of interest above and below from the long term composite are 1268.25, CLVN, 1254.25 CHVN, 1252.50 CLVN, 1248.25 CHVN, 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.
Hypotheses for Wednesday
1) Possibly a slight continuation up as an Open Rejection Reverse tagging 1252.50 or 1254.25. I will look for this if ES opens over VPOC but does not test 1249.25 VPOC right away. Depending on how well defended I will be looking to short at these areas.
2) Open Test Drive where it opens above VPOC and tests 1249.25 then moves up over 1252.50 and 1254.25 and above. If it tests lower and defends 1247.50 I may also look to go long. This is an HVN on the previous RTH session. The line in the sand for me is 1245.75 CLVN. If ES dips that low and is defended I may look to continue going long.
3) If ES gaps down several points under VPOC I may look to go short on rallies. Levels I am eying are 1250.25, 1249.50 VPOC, 1248.25 and 1247.50, 1245.25.
Possibly more hypotheses in the am after GLOBEX. I will not be trading much Wednesday.
How the day went
December 22 RTH Session
Es opened at 1251.50, tested 1 point down to 1250.50, 1 tick below yesterday's close. It then made it's way up to 1252.50 CLVN then 1254.75, within the 1254.25 HLVN. Entire range for the day was 4.25 points with the IBH 1252.50 and IBL 1250.50. VPOC was 1251.75.
I did not trade today as I was busy and volume is low. However, Hypothesis #2 above was fairly correct. It tested down to 1250.50 (a point above 1249.25) then moved up to 1252.50 and 1254.25. These volume nodes are amazing. My hypotheses are getting better and productive as I am more aware of what to do when the time comes, however the low volume of the holidays are shaking my confidence. I would have probably shorted and stopped out at 1252.50. I would have re-shorted again at 1254.25. I was doing good with nice runner's before the holiday. Now the range is so small, there's not a lot of running. Note to self to not trade the entire holiday week next year.
I did not trade today as I was busy and volume is low. However, Hypothesis #2 above was fairly correct. It tested down to 1250.50 (a point above 1249.25) then moved up to 1252.50 and 1254.25. These volume nodes are amazing. My hypotheses are getting better and productive as I am more aware of what to do when the time comes, however the low volume of the holidays are shaking my confidence. I would have probably shorted and stopped out at 1252.50. I would have re-shorted again at 1254.25. I was doing good with nice runner's before the holiday. Now the range is so small, there's not a lot of running. Note to self to not trade the entire holiday week next year.