In my last post, I noted the robust character of the current US Stock Market as represented by the S&P e-mini futures (ES). The market had been closing off its highs, suggesting some supply (but, nonetheless, putting in higher highs and higher lows). I said that a close below 1495 and a drive down below support at 1490 early in the week would ignite a reaction. Well, the market dipped to 1491, bounced off of support and rejected lower prices. It then rallied strongly higher and closed firm.
This is how we trade. We note key levels and then attentively watch what the market does at these levels. From these blog posts, I hope you get a sense of the levels that I pay attention to and play off of. They are never 100%, but, boy-oh-boy, are they good markers!
Anyway, a pullback didn’t materialize here. From the chart, we can see that the 1510 to 1520 area should provide some resistance. Will it? I don’t know. But I do know it is a logical place for the market to encourage supply to enter. Thus, I will look for evidence of selling on the intraday. If it materializes, I will look for a short opportunity to ride the pullback down. If it doesn’t materialize, then it is onward and upward!
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Hi Gary,
I have been a long time subscriber to your blog via the Google email updates system and read every single one of your posts mindfully. There is a wealth of information in these postings. Any serious student / practitioner who is in these markets will learn invaluable lessons in market behavior. In an age of proliferating financial blogs, yours offers a timely, practical and, for those who are well trained and well prepared, truly actionable market analysis. As one of your students who has attended your courses and benefited enormously from them, I see your blog as a continuing education (CE) tool. I am most grateful to you for the excellent market analysis you post here in your blog on a frequent basis.
My question: In the current post (01/29/2013) you state: “From the chart, we can see that the 1410 to 1420 area should provide some resistance. Will it?”
Did you mean to say 1510 to 1520 area rather than 1410 to 1420?
Thanks in advance for your clarification.
Sincerely,
Rama.
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Hi Rama,
Thanks for your kind comments. The blog is, indeed, a kind of continuing education format. I only wish I had more time to devote to is. So many other demands on my time take up much of the available time for this and other enjoyable pursuits.
And, yes, you are correct. The levels are 1510-20; not 1410-20. You caught a little bit of my mindlessness :). Thanks for catching that. I’ve corrected it in the post so others won’t be confused.
Cheers,
Gary