Wednesday, January 6, 2010

SUPPORT/RESISTANCE FOR 1/6/2010 Trading day

Ok, so I am seeing some weakness among the other major indices (YM, NQ, TF) so I expect to see some weakness in the ES early on at least. We did have a breakout to the upside on the XLF weekly chart, which I will post sometime today. If that holds could be a huge catalyst for the move up to the mid 1200's in the SP500.

For today, I expect another rotational day with a little wider range than yesterday. I could see another 15 point range day today as the market continues to build value.

Top chart shows the range extensions for today using yesterday's price action, I have outlined the key S/R levels on the chart. The bottom chart shows market profile, in other words where the volume was transpiring during each trading session. This information is invaluable for us traders because we now know if the market is net long/short at the key levels and when their positions are underwater. Yesterday we actually had more total volume than the previous day which was a wide range up trend day. As I have noted on the Market Profile chart we built a lot of value above 1127 in yesterday's action which is so far reassuring to the bulls. But moves below put the bulls underwater, they would most likely add to positions on the first move below, but the second (if there is a second) move might cause a lot of them to give up their positions. But I have marked the levels on the Market Profile chart as well.

As I type here at 4:30 am, the Asian markets are up about .50% each and the European markets are so far flat with slight bias to the downside. The DX, Gold, and Oil all hovering slightly above their daily pivot, Euro trading at S1. So far supporting my rotational day theory.