End of day Review 2-22-11 Tuesday

At first my expectation was for ES to trade back up to the value area high at 1342 area with the bullish action in the first 60 mins. ES traded up to 61.8% retrace of the bigger move down and sold off and never looked back. Then when ES reversed and started to trade lower I was looking for shorts below 1319-1321 area which we got at lunch time. After that there wasn’t any good opps for me to take except a long at 1314-1316 level after it chopped around there for a little bit and put in a 30 min reversal candle. It was good for a few points only as ES wanted to trade lower. The 1310.25-1308.25 level shut off the selling as expected. Now that we have continuation and we are away from the highs of the year area maybe we will get some good trade opps going. I will monitor globex tomorrow morning to get an idea of what we can expect tomorrow. Buyers will want to see this above 1306-1309 to stay in control of the bigger picture. If we take out this level then a move down to 1282 is likely.

Trades: See 3 min trades chart for details

Pre Market analysis 2-22-11 Tuesday

News: S&P Case shiller HPI @ 9AM, Consumer Confidence @10AM

Daily Chart notes: ES has been in a slow grind higher on really low volume. Recently we have seen ES break the daily wedge due to the political unrest in the Middle East.

MP Notes: WE sold off during Monday holiday trading and globex has seen ES trade down to the 1322 support level and this has held overnight giving ES a rotation back up. We have a bearish macro with globex value lower than Monday’s session. But given the holiday trade I need to wait for this to play out. Currently we are filling in the C pattern on the weekly profile and with only consumer confidence number released today we could trade around here for the session.

Trade plan: ES has been showing some signs of weakness the past 2 sessions. We have traded down to 1322 area of support and bounced there. The recent action can be viewed as a pullback in this big uptrend. The big picture buyers are still in control and they will not want to see this below 1319-1320 area. I expect the buyers to keep ES above this area and will look to play longs at support for a rotation back up into value high around 1342 area. If the selling continues on the back of a bad consumer confidence number or more Middle East unrest then a break of this support area is likely and I will look to be a seller on any retracements. I expect the 1310-1308 area to hold and the selling to shut off by then. Over all we are having some vertical development and could see ES trade lower today if the buyers can’t keep the market up. If they can then we could be working with the new developing balance are of 1319-1342 but this is yet to be seen.