E-Mini S&P 500 Futures
ES built acceptance in the 1182-1184 area and broke to new highs today. Everyone can see we're quite extended here, but at the same time we're not seeing any topping pattern on the Daily chart. Market participants are still displaying an appetite for Risk; TF, NQ, and EMD all put in fresh highs today. YM is the only index that was unable to set a new high today, but is trading ~100 points away from 11,000 (important psychological level). This slow melt-up on light volume makes it difficult to time the market for a swing short. On the bright side, we don't have to worry too much about that while trading in the day time-frame. It's important to keep bias in check because we don't want to be the early short who's almost right but ends up losing on the trade. I'd rather get in at a slightly worst price, but with a higher probability setup. I am a Responsive Buyer in this market, and am being cautious on the Long side. By that, I mean I'm not reaching up into the Long trade setups, and am letting price come to me by entering Long on pullbacks at Key Support. If we get a sell-off going, I'm willing to be an Initiative Seller though; selling at the bid and adding to my position as it moves in my favor (I do not add to losing positions). If we break below the Initial Support Area of 1181-1183 tomorrow, I will begin looking for Short setups against that area. If price holds above 1177, and then rotates up through 1183, I will begin to look for Long setups for a test of 1188 or higher. The 1187-1188 could pose a problem on first touch, and is an Area where you could scale out if you're holding a Long position into it. When using the Key Levels, they're not merely turning points in the market but should also be used as targets. For example, if you were Long off the Overnight Support Area on Tuesday, you could have used the Overnight and Initial Resistance Areas as places to exit your Long position.
Econ Data
MBA Purchase Applications at 6:00 AM (CT), EIA Petroleum Status Report at 9:30 AM (CT), 10-Yr Note Auction at 12:00 PM (CT), Federal Reserve Chairman Ben Bernanke speaks on "Economic challenges: Past, Present and Future" to the Dallas Regional Chamber at 12:30 PM (CT), and Consumer Credit at 2:00 PM (CT).
ES - Daily Chart with Volume Profile and Key Levels
