[TheNegotiator]

Area between Friday's VPOC 1176.00 & close 1177.00 may be a good initial gauge of initial intentions if we test it. Overnight low is currently 1176.25 so that is a decent enough pointer that importance has been placed on it. To the up side, it's likely to be Friday's high. So currently the market is balanced between Friday's volume point of control and its high.

[Nikorivera]

Do you have a bullish or a bearish bias for today?

[TheNegotiator]

It's looking strong, but overall the market has had a big shock. I think we may go up but I'm wary of finding sellers too. It doesn't matter too much which way it goes though, I plan for both.

[joshdance]

Originally Posted by steve46 »

Yep, sorry about the typo

1183.75

The attached chart makes it easier to see what the mechanism is....basically you want to let the market show you a reversal of momentum, and from my point of view the best display of a change of momentum is seen when price tests a BB extreme, closing at or outside the BB then reverses direction moving back inside the band. In terms of my approach, I want to see this happen at the top of an overhead supply node (blue horizontal block). Preferred entry is just below the red arrow...

Steve, when taking these trades where is your stop typically, on the other side of the node? And are you looking for another node for your target? I know in this example you're talking about using BBs, but I'm talking about what you typically do.

[steve46]

Originally Posted by joshdance »

Steve, when taking these trades where is your stop typically, on the other side of the node? And are you looking for another node for your target? I know in this example you're talking about using BBs, but I'm talking about what you typically do.

Yes sir you are correct, I want to position my stop just outside the node boundary. The way I position them I generally do not see price come back to take them out if I am on the right side of a trade.

[steve46]

In response to Negotiator's comment

I always defer to the tape...that is to say, I am always reading the tape to confirm not only my entry but whether to stay in the trade and where to exit....

Also in past I have put a DAX chart in place to guide my trade selection. Until recently the DAX has lead the ES....now unfortunately with mounting concerns about sovereign debt it seems that the DAX no leads and that means that I have to look less to that index and more to the ES alone to make my decisions.

[TheNegotiator]

It can be difficult to use another market as a lead as relationships come and go. Dollar index is a decent gauge for ES at the moment although I wouldn't take a trade based off it.

Anyway, for Tuesday I have had an initial look at the story and attached is a chart for you to look at. No rights or wrongs btw. Just showing you a part of what I am looking at at this moment.

So one thing to bear in mind is that the overnight picture is not yet complete as the chart is 3.5hrs before RTH open and as always anything can/will often happen. So you have to have an idea of the other side of the story if the market starts to look strong.

Yesterday opened pretty much on Friday's high, failed to enter the range, looked higher and then retested the low. After it failed to go much lower, ES basically trended up for the rest of the day. The point that interested me somewhat was that 1200 initially rejected and on further buying towards close, the VPOC for the day was put in at 1199.50 following by a not unusual close within the initial balance at 1196.50 on what was a neutral day. So the VPOC was put in below 1200 after having moved up into close. I think this shows that there were opposing sellers at this point on the first test. To have a better feel for the market today, I would want to see what the action is by open and on open. Just remember that given volatility, news items, eco releases speakers etc. have the potential to move the markets right now.

[TheNegotiator]

In all, not much was achieved today. A neutral day to follow a neutral day. Although the price action picked up, the objectives set out were defining in containing the ES. More action in this area does create tension for a stronger breakout of the balance. The tighter and longer the balance, the more likely it is to shoot off when balance is broken. Anyway, here's the after chart today.