Nov 292010

After exploring up overnight, ES is set to open at the low of Friday’s range:

If you look at the micro-composite profile (left) you can see we’re in between two big balance areas.  So my thinking is that we’ll move to one or the other, maybe even both.   Today looks to be challenging because the bottom balance area is quite large with a 15 pt range and I’m not sure we’ll cover it all.

If we go up:  I’ll be looking to get short at 86.50 with a target of 79.00.  If we rotate around the 89.75 balance area then stop out and be looking to get long 86.50.  If we can make to 95 I’ll be looking to get long 91.75.

If we head lower without testing 86.50 I might take a stab at a long at79.  If not I’ll be looking to for a pullback up to get short (say 83.25 area).  If we rotate around the 79 without much OTF presence then I’ll be looking to get long near 71.75 as well.

My main concern is not fighting any OTF-driven moves.  I’ll wait for a pullback or just sit out.  I waited over an hour and a half for my first Bund trade this morning so I can be patient.  Today is a short day for me as I can only trade the first 45minutes until I come back for the last 90 miutes.

Good luck everyone!

Update: 9:15am NY time:  ES moved down to the CHVN after my post.  Doesn’t change too much except my starting point is now on the CHVN.  I’ll look for OTF presence to see if we are going to move outside this balance area.  Otherwise I think my scenarios are still ok.

  2 Responses to “ES Trade Ideas Nov 29”

  1. Thanks for the post. What are some signs of OTF trader presence?

  2. Great question. I don’t know if I can explain it other than when it’s obvious. Obvious signs are an Open Test Drive or Open Drive opening type, or a strong breakout out of a balance area.

    I’m working on getting a feel for when the day traders are in control and when longer term participants are active.

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