Index Futures Week 7

[Soultrader]

Seeing alot of activity and popularity in the Forex forum I decided to do a similar thread starting with Week #7 for the emini futures.

I want to begin with the YM starting from a daily chart. On the daily, we are still in a uptrend but the steam is clearly running out. We are still respecting the trendline and the 12600 level will be extra key.



What concerns me is the decreasing volume on the past couple rallies. We are seeing more volume on the sell-offs. This is a warning signal.

The chart below is a 30min YM chart. We did see a nice double top around the 12730 level. Friday met resistance at a key level of 12700, also a gap fill from 2/7/07.



A couple of levels I will be looking for from Fridays sell-off. The chart below shows the fib retracement levels. 12633 shows the 50% retracement and 12648 shows the 61.8% retracement.




Also want to point out a few VPOC from a market profile chart. These areas will be ultra key to watch until they get violated.

Open VPOC's

12722, 12687, 12547, 12501, 12450



My reference point for the week will be the key 12580 level. This was a VPOC from January 31st, 2007 which got filled last Friday. The monthly pivot is also at 12583 and will be a good level to watch.

Quick plays at the open for the YM:

Overnight session meet resistance at the PP/daily pivot at 12630ish. The weekly pivot is at 12640. Anything to the upside will need to take out this 12640 level. I will most likely go long above this level as I do not see any resistance until the POC and R1 level at 12687 - 12688.

[TinGull]

The daily chart shows us that we met our support at previous resistance (for many weeks) at the 807 level. We dipped a little below, but no follow through and buyers snatched up the opportunity to grab ER contracts at that low low price! I’d look for price to have trouble breaking down through there, and if we do find ourselves into 804 land, then we’re back to some rangebound (20 points or so) trading.



For our Market Profile guys and gals…there was a nice double distribution day on Friday. A couple areas to watch in the coming week…798.9 which is a VPOC and also a psych level at 800, and 786 (another VPOC) if we head down there. We may be in for some more upward momentum as people could be feeling it’s a good value at it’s current price.



We are still outside of the monthly value area to the upside. Interesting to note is this…the 2 low volume nodes of 805.3 and 814.4 provided some great levels recently for support and resistance. What is VAL for today? 805.6…..So if price happens to come down there again, look for more buyers to quickly bring it back to 809-811. This could happen over the next couple of days, provided we don’t, for some weird reason, come down and start filling that vacuum. If so…801.8 is monthly VAH and 794 is monthly POC and the high volume node.




Larger profiles are great to see a bigger time frame and where we might be heading. 814.4 is going to be a tough contender for a resistance level today (I assume we’ll see it today as price is at 811.80 right now). With the amount of range ER is having lately, we could certainly see a rotation from 814.4 to 805.3 happen today. Something to keep in the back of you mind.

[Soultrader]

We had a very interesting continuation gap on Tuesday. Feb 13th, 2007. YM gapped approx 40pts and took off to close at 12687.

Here is an interesting YM 10 minute chart using fibs:



YM gapped and tested the 50%-61.8% zone which held as support. This tells me that the decline from Friday is no longer valid. However, this could actually be a short squeeze. The next line of resistance will be Fridays high at 12703. This will be a key price level.... if it can not break, it will probably reverse back down to fill the gap at 12585ish or at least to the VPOC at 12595.

Now to the upside, the ceiling gets thin and I find it hard to design a trading plan when it starts making new record highs.



We have a VPOC at 12722 and also the high from 2/7/07 at 12736. Anything above this level and.... I would start looking at daily, weekly, and monthly pivots.

Couple key levels to watch for at the open:

Resistance

12703: watch for reversal here.. will be BIG
12725 - 12735: I may fade the first attempt to 12735. But any valid breakout above this will be strong.

Support

12663: as always the POC
12640: any break below this will probably take it to the VPOC at 12595 or a possible gap fill