END OF THE YEAR SLOW RUN BO

THE ranges were announced early.  The upper range was being tested at the top of the triangle.

[07:18] <CM> targets today  1259.25-1257.75-1256.75  ascending triangle from around 5:50am est 




By the Rth open, PA had failed the long BO and run the range for a Short BOT BO.  They would see a 50CB fail at B4 for a long run to the upper BOT at B8.  This is where the global and Rth stories combine.

Global readers saw the LBOT fail and run short until the 50CB failure at B4.  But B8 was a TL failed BO and  LBOT FBO for more shorting.  It took all day, but shorts got their BO-5.

The plays of the day were the LBOT failures and 50CB's.  The keys today:  the BOT ranges, the bearish TL, and watching the EMA move bearishly through the range which allowed better short PA entries.

LONG BIAS FAVORED: MKT TRIES BO-10 12/29/11

QUICK NOTES:

Longs were favored today.  Early traders saw opportunity at the Mid BOT and EMA (1248) at the open for rather quick +2 and +3 trades.  PA quickly push higher and had a test of the L-BOT by B4.

 PA rose again to hit BO-5 and reversed back to support at 1251-1251.5.  PA continued to test the channel extremes as bullishness remained in control.

BREAK OUT RUN 12/28/11

QUICK NOTES:

The BO short was fast and furious today.  One 50CB failed which meant more selling.  The PA trended down with little regard for the EMA resistance.  A BO-15 day.

OPEN RANGE BO-5 12/27/11

QUICK NOTES:

open range run with a BO-5 hit.    The 1m went negative on the EMA at 10:20 1262.5 for the long hold exit.  At 10:42 the 3m went EMA- at 61.75 (generally bar closes) for shorting the sell off back to the 59.5 50CB area.

BO WITH FBO-5 RANGE REVERSAL 12/23/11

[09:33] <CM> es ranges today  1256-1254.25-1252  bo sh b1
[09:37] <CM> longs at 52.5-53 for reversal ie fbo 


B1 did hit a BO of the Short BOT (break out target) and B2 was struggling to continue.  If this reverses, safe longs were around 53 (close above B1 body) with aggressive entries prior to the close.  The weakness of the BO was confirmed at B4, where a gap bar reversal hit.  53 was still OK, 51 was better.  Ascending triangle and a range run expectation did not disappoint.

B21 CB50 at the top of the triangle and at the Mid BOT was another value entry.

HAPPY HOLIDAYS AND A HAPPY NEW YEAR
This ends our blog series for 2011.  Hope you have enjoyed.

Some variation on time with stagnant key points:  original at 8m

RANGE RUN OPEN-BO LONG 12/22/11

A CHART, A CHART, my kingdom for a chart!

It is interesting to see post in various corners as to "how" they are reading a chart.  Also interesting, is the various charts referenced.  As I see it, different time frames make sense for gauging trends, however I'm not convinced that a 15m "signal" has any bearing on a 5m chart player.  My gut would say smaller time frames work for scalpers, and higher time frames work for institutional or "big boys" trading.  Deep pockets, can swing longer with the trends.

There are those that use one chart for trend, and another chart for decision making.  Once a trade signals (various definitions) they will switch to a lesser chart to capture a "better" entry price.  Essentially, what is the trend, and trade with the trend.  A 15m charter may use a 5m for entry, whereas a 5m charter may use a 1m to time the entry.  Regardless of the scenario, practice and find what works for you.  If it's one chart, or a host of charts.


Quickly:   Today we had a range run open with a LONG BOT BO.  A bearish channel developed into midday, and the bulls broke that channel for a run at the BO-5 at 1248.5.

Ranges for the ES today were:  long 1243.5     mid  1241.5     shorts  1239

Since we are discussing chart variations, one I like is the 8 minute chart.  A hybrid, so to speak, of a 5m and 10m.  For Fibonacci followers, it's a fib chart value. (1,2,3,5,8,13,...)

There was an inner channel today of the larger one seen in the 5m chart.  It appears as a flag type look in the 8m.  When PA seems choppy, I will often switch to the 8 to smooth out trading.

The 50CBs seem better defined, as does the BO long.  Certainly the upward bias from the MID range is better defined.

NARROW RANGE DAY 3 12/21/11

FROM a global perspective, B1 failed to BO a narrow bearish TL and established our first 50CB of the day.  It was not immediately tested, thus the selling trend continued for a short BOT BO and a run to test the BO-5 level.

As previously mentioned in yesterday's blog, a failure or noted weakness at the BO-5 tends to reverse.  We see that again today and bulls reined until another upper TL FBO at B13 and a test of B1 50CB.

Bears take control again, and retest the BO-5.  More weakness is seen at  B28-29 MAXT at the EMA.  PA falls short of a BO-10 and we begin a bull channel run to the EOD.

Bullish longs were available at the reversal signal on B37 (entry B38), B53, and B62.  CT shorts were seen a the failed range reversal at B43-44, and the reversal signal at B56.  The bull channel move was expected to test B1 range and BO to 1236-37.  It moved to the Mid BOT at 1239.

NARROW RANGE DAY 2 12/20/11

YESTERDAY was a narrow range day,  When the range is narrow, we usually see an extended breakout.  It did for the bears.

Last evening the bulls returned and were successful in keeping the Break Out Target (BOT) Ranges unchanged. We have seen this occur previously, and another extended BO day was expected.

Enters B1 a BO of the LONG BOT for a strong run to the BO-5 level )the BO range plus 5 points).  The BO-5 is our standard first target.

1. If PA weakens before BO-5 or at/near BO-5 we tend to see a reversal back to and into the range.  Often it will BO at the opposite range.
2. If BO-5 is strong, target 2 at BO-10 is expected.

Another bullish sign was the open (not tested) 50CBs at B2 and B12, and a strong EMA.  A reversal signal at B45 and possible double topping at the end of the day was the primary bearish attempts to PB PA.

NARROW RANGE EQUALS AN EXTENDED BO DAY

WHEN ranges narrow,  we often see an extended BO day.  Today was no different.  B1 creates a 50CB (and at the EMA) which was quickly tested and broken for the first short of the day.

Bulls tries to return into the range on B13-another 50CB but was followed with a reversal signal on B14.  Not perfect (perfect would be a small body inside bar) but it worked for another short.  B15 BO of the 50CB helped. and we had a failed reversal into the range.  Another hint as to weakness. the EMA remained in the Lower Trading Range.

B16 50CB was not tested, a good indicator of the strength of the BO.  PA remained around the BO-10 area (10 points below the short BOT).  Another reversal bar signaled at B54 followed by a MAXT with the second half being an extended 50CB bar.  BO-15 and 20 hit.

Another fantastic day for the range BO for short traders.

FAILED BO-5 RANGE RUN 12/16/11

We see this occur: PA runs the range and breaks to one extreme, fails, and reverses to break the opposite extreme.

1. B1, 2, and 3 run the range, fails and returns to the lower short for a BO.
2. Play range-to-range and watch the 50CB failures
3. B4-5 was a MAXT/CB50 combo  and CB50 BO.  The CB at 1218 was not tested.
4. B5 begins the range run and a new CB50.
5. The long break out should run for 7-10 points from the low (1216.5) which would be near the long BOT BO for 5 points (BO-5).
6. A BO-5 is always the target 1.  If it fails (or other signals develop) PA is likely to  reverse the range.
7. B9 was a potential reversal/PB signal
8. PA moves to test the B7 CB50 and was a range reversal
9. PA moves to test B5 CB50 at 1218
10. Short BOT BO
11. BO-5
12. BO-10 fails; should see a PB to the BO-5 level
13. B 30 CB50 failed test

RANGE BOUND DAY 12/15/2011

Overnight, the PA rose into the trading range and a bull TL support was beneficial for entries.  The last being at the EMA in the pre-open for a B)-5 run.  The US Open range for  the bears/bulls was established at 1219 (B1 high) to  1216.25 (B4 low).  The latter (and the absence of a close above the pre-open control bar CB) was a strong suggestion for more selling.

Two CB levels later we are testing the low of the range run at B15/16, however a range run gap developed.  PA reversed, and took two bull pushes to hit the long range again at B24/25.  A HL developed at B29, and a "W" pattern completed at B35. (LB at B12 b16 B25 b29 B35).

Range bound, control bar breaks and retest, range runs, FBO's.  Missing? Yes, the channel.  Had that too,  Bear channel inside the range with extended runs from both TL's.

HALF RANGE FAILURE WITH A BO 12/14/11

Day started with stocks seeming oversold with an upside to BO-5/BO-10.  PA flashed indecision with a 2 bar doji ( put the two together visually) at the SB which was a reversal look.  Range run longs with a stop exit +4.  9 bull bars found seller resistance at the MB.  A MAXT 50CB combo developed which was not good for the bulls.  PA reverses and runs the SB for a short BO-5/BO-10.  Still 5/10 day, just in opposite directions from original thoughts.

A B4 control bar dominated the mid morning and was the focus of the bull PB later in the day.  The 50CB failed and more shorting prevailed.

BO WITH A RANGE RUN REVERSAL 12/13/11

Ranges were set and B1 delivered with a BO long.  Targets for BOs are set at +5 as a minimum.  At/near the BO-5 look for 1-continued strength in the trend (hold) or 2- a reason to get out.  FBO reversals are frequent in range bound days.

Swing days will run 10-15, with BO-15 tending to be a max run.  If so, the opposite players tend to only get a PB to the BO-10 area.

Super swings and news events will push to BO-20.


ORDER OF TRADERS

1.  look for a BOT (break out target) BO to BO-5

2.  Look for reason to hold or exit around BO-5    Range days will show weakness and often reverse for a range run

3.  Strong BO-5 will seek BO-10/15     Swing days

4.  PA reversing back into range is expected to run to 1-the Middle BOT  2- the opposite outside range

5.  Control Bars are important all day.   A 50% test is expected.  If no test, trend continues; if test fails, trend of control bar continues; and if it breaks, CB trend reverses.  The test are immediate (2-4 bars) or AS TODAY- B12 WAS TESTED AT B55-56.


6.  All trades, consider where are the BOT Ranges, where is the EMA, where are the BO Levels, and what is the trend strength- number of bars, size of bodies. wicks & tails, higher lows or lower highs....

SHORT BO MAX RUN 12/12/11

Nice break out day short with an EMA resistance for a full BO-15  to BO-20 run.  Opposites rarely disappear, and the bull was expected to regain position back to the BO-10 area.

When you get one of these days, look for a with-trend reason to get in...

Potential entry spots today  to consider for future trading.  The setups repeat.

LONG BO DAY RETURNS 12/9/11

B1 ran through the short target (SB) and the EMA.  The 50%CB was never challenged and PA ran the range to the Long BOT (LB).  A FBO (B8-9 is a reversal at the LB) which returned to the EMA MB area.  B14 was a control bar.  On the chart is a simplified diagram of the 50CB:

1.  PA creates a 50CB bar.  This bar is deemed to control PA in an area
2.  Additional bars will continue the trend, or PB to test the 50CB
3.  If the 50CB is not tested-trend continues;  if it test and fails- trend continues; a break is a reversal

B1 50CB was not tested so trend continues.  B14 was tested and pushed above for a BO reversal.  Both were helped by range support and the EMA.  The B14 reversal was strong:  a HL, at the range, and at the EMA.  Results?  PA ran the LB for a BO-5 (range value plus 5).

B27-28 created another reversal where the bull appeared to be exhausted.  Additionally, b28 set a 50CB.

A post that many perhaps seemed to miss, and became important:

[12:00] <CM> how i see this and hope i can write clearly  b27-28 is a reversal pattern at the +5 from my long range  b28 is a control bar  if pa does not test 50%  more dn  if it test 50% and fails more dn  ema close and can be support for more up and a long above the 50% level should work..  (bold added)


[12:16] <CM> still interested in b28 50% level roughly 47.25-47.5


A 50CB tends to be important for the market; similar to importance of the ranges and the BO targets.

FBO RANGE REVERSAL SHORT 12/8/11

Yesterday we saw a FBO  at the BO-5 reverse reversal long.  Today,  a FBO at BO-5 long reversal short.

[08:23] <CM> ranges today for es h2 contracts   58.25-55.25-52.5 the open bull (OBU) and open bear (OBE)  add at the open  general b1-5
[08:26] <CM> es z contract  64.5-61.75-58.25
[08:32] <CM> longs bo
[08:34] <CM> +4  bal at +2stp
[08:35] <CM> large bull expansion bar  stp to +3
[08:39] <CM> bo-5 hit btw
[08:42] <CM> exhausting  move stop to +5 bal  http://screencast.com/t/Zsb31zwpfUA
[08:42] <CM> x bal done

PA was exhausted and reversal signal showed weakness.  More weakness at the 50CB failure  led to the continued range run shorting.  The lower targets hit- BO-5, BO-10,,,

Bulls had weak attacks halted by the EMA at  b4, b16,  b34, b54, and b58 before one last attempt that hit the upper target discussed in chat  (1245)

[14:13] <CM> imho  mkt is tired  major selloff   down some 20 pts  more from preopen  there is no rush for pa to move much beyond 3-4 range  so up say 45 lower 36

FBO RANGE REVERSAL LONGS 12/7/11

The market started in a down push but failed to hit the BO-5 level, reversed and ran the range to BO for +5 and +10.

Added to the charts is a new range for the Open Bull (OBU) and the Open Bear (OBE).  Just another measure to add to the BOT Ranges.


THE ES H2 CONTRACT

ES Z1 CONTRACT

12/6/2011 AFTER HOURS

From time -to -time it worth a look at the after hour market.  The Asian Market activity can be a play in the ES


see 12/6/2011 day post for line details

The day ranges are 24 hours, and will be recalculated in the Euro Zone (US pre-open).

Bullish TL's developed from b81 to 96 and the PB's b103 and 109.  These are rising and offer opportunities. We see an ascending triangle  and expected a BO.  PA holding at the EMA was a go for the 1259 and 1260 targets, the later in a new leg.

RANGE BOUND DAY 12/6/2011

Daily ES range    1260-1254-1248

b1  Open Bull Range established (OBU)
b2  failed continuation
b3  Open Bear Range established at the close (OBE) just above the daily Middle BOT (MB) at 1254
b4 continuation of short
b5 reversal bar to establish the initial low of the day (LOD)
b6-7 reversed the OBE/OBU range
b9 low failed at the MB suggesting more up
b11 range bar with low at the OBE confirming more bullish
b13 FBO of Long BOT (LB)  established 2nd HOD reversal

Range run to test LOD b28

b29 MB reversal but additional bars failed to run the OBE/OBU range creating s/w action of intra-range PA
b44-45  two intersecting TLs above MB and the OBE  worth a long
b48 hits target
b49-51 highs stall  establish an upper TL (yellow).  we have Lower Highs  Higher Lows with an extended BO expected
1257.75 was viewed as a limit risk short (upper TL resistance) and PA  pushing inside the OBU/OBE

The bears could not break the lower TL.  thoughts:  Bear BO delayed, more  S/W PA  or possible bull test of the UTL to confirm resistance (and fbo) or perhaps it will be the anticipate extended BO.

clues:  b58 tested the UTL
b59 stalled at the EMA
b60  closes above the OBU
b61 closes above the UTL and is a BO test
b62  continued bull BO at the LB   long 1260   Third bull, limited risk

target is the BO-5 level  (+5 point from the LB)   Exits

BO-5 was a FBO with a reversal.  Additional weakness when the PA failed to break the 50CB level.

PA returns to the OBU/OBE range.

Day is done.

EARLY BULL FADES

An early bullish TL developed in the Euro Zone Market and continued into the early US Market.  The ranges were released to the chat rooms and we had a BO fairly soon thereafter.  A second test of the BO was another entry point for longs. and a pre-open surge was a long off the Bull TL to the BO-5.

B! established the Open High and we had the 1st reversal to the Bull TL for additional longs for an additional run to the BO-5 area and a BO of B1 H to establish the 1st HOD which failed for shorting.  At this point weakness is noted in the fact that the EMA had not crossed the B1 H.  PA held at the EMA and we see the 2nd FBO of the HOD which was a short with a HOD+1 stop.

B51 area was a PA reversal at the BO-5 and a 50CB level.  B52 was a trend continuation bar when the high of the bar failed to test the 50CB, and pushed the PA down for a range reversal short.

The Long Range and the EMA were resistance for a FBO short for a 1 bar range reversal.

SELL OFF SHORT BO DAY 12/2/11

From yesterdays blog:  Quick review:  Monday expansion, followed by range bound, another expansion, and another range bound today.  Missing?  A corrective PB or profit sell off.

Market rose in overnight trading  and hit a resistance at the upper range.  A slow drag out retreat to the lower range ( a range run short) in a bear channel.

Bulls tried to run, only to stall just above the mid range and a 50CB from the spike bar in the pre open.  A break of the 50CB is a reversal, a failure is trend continuation.  PA contracted and another bear channel developed inside the first.  BO-5 and BO-10 hit.

RANGE BOUND DAY 12/1/11

Quick review:  Monday expansion, followed by range bound, another expansion, and another range bound today.  Missing?  A corrective PB or profit sell off.



Overnight we see a range run with key buy points into the US Open.  PA was working with the ranges established, and with strong bull TLs.

at the open , B1 sets a range and B2 is the 1PB at the middle target range 1242.  deemed support for a long to 1247 with a secondary entry at B6 push back through 1247.  The target of BO-5 was missed suggesting today would develop as a range bound day

after the 1247 BO, a flag develops at the exhausted run.  B9 is a PB to support.  B12 becomes a LH and a TL reversal setting up the range reversal short on 1247.  1246 level is a 50CB at the EMA and a stronger resistance for more bull action.  PA runs bearish for another 50CB and a 10 pt run from the HOD.

double bottom with upside targets 83.5 and 85.5

targets begin to hit; looking for 1247 test

the bull is hitting target but we see 7-8 bars with no bear.  Can not sustain. We needed a bigger push bar, not incremental steps.

1247 resistance after early AM BO.  Bears will seek PB to prior bull targets

day ends range bound

LONG BIAS DAY

Read the prior post.  Looking for 1220 and Wednesday would be another BO run day.  Got both.

Quick look at the chart.  We see the three phases:  open bullish run, a bear trend channel,  followed by another bull channel   breaking to the upper long targets.  Strong BO Days will run 10-15 points.  An excellent end to November and a strong support that the market low ( for balance of the quarter) is in.

Just for fun, here is the 15 minute chart with the 5m notes and lines:

CHARTS BY TRADING ZONES:

RANGE BOUND DAY

A quick look at the chart and some commentary today.  We were looking yesterday for the bull to retest 1200, and we got that overnight.  With PA stalling ( a reversal) at the BO-5 level, it appeared we would have a range bound day after yesterdays major bull run.

COMMENTARY TODAY WITH ADDED NOTES:



[09:35] <CM> bearish channel from 5am est points of interest today 1198-1193-1189.25 the test of the 1200 is in overnight bias today test support 1190 area and try 1200 bo
[09:40] <CM> b2 longs    THE BULL BIAS WAS LOOKING GOOD FOR AN ENTRY
[09:43] <CM> +3 part bal be+2t
[09:51] <CM> +2 for anyone taking the 93 and/or b4 PB    1193 WAS DISCUSSED AS A VALID ENTRY.  NEWS PUSHED PA TO 1200
[09:52] <CM> a close above ema moves stop w pa
[10:02] <CM> x bal 99.5
[10:03] <CM> more upside but on a pop expect some pb then pa will settle..
[10:06] <CM> chart look es (LINK REMOVED)
[10:07] <CM> the 1190 area support held and we saw another test of 1200 mkt long at 1198 bo
[10:15] <CM> two thoughts +10 from mkt low (1191-1201)    1206 from b1 +10 roughly..  8-10 points are considered exit points
[10:17] <CM> 1203 is long bo +5   B8 held at the EMA; 1193 was the long target for a BO
[10:20] <CM> we should get +5 http://screencast.com/t/P8497el3
[10:26] <CM> bo 5        time for a break happy trading all
1[10:28] <CM> reversal setting up here potential ema pb   MAXT B12 reversal near BO-5 level
[10:34] <CM> link removed
[12:57] <CM> the reversal did pb to ema 3 support hits on the long target pa range bound in a descending triangle 50/50 here bias is long short watch around 1193 http:// (link removed)    From the MAXT we see three PB's from the high TL to the support at the long range-1198 (can be a triangle- lower highs with higher lows) followed by a descending triangle with a BO.  By the time the BO occurred, (took a hour +/-) the 1193 view was modified to watch for support
[13:53] <CM> looking for the bo http://  (link removed)   B53 was a BO but very near the support at 1193
[13:54] <CM> and 1193 support

[13:56] <CM> looking for 93 to hold  for longs    reply to a question
[13:56] <n> you going short or long?
[13:56] <CM> long                                          reply to a question

[14:04] <CM> http://   (link removed)
[14:06] <CM> 97.5-98 target       the 93 long should be able to return to the upper PA prior to the BO, B47-48   (and the 1198 long range)
[14:41] <CM> http://  (link removed)
[14:43] <CM> push 2 from ema
[14:44] <CM> x 97.5 +5
[14:45] <CM> recap expected bo to fail at 93 support. no 5tf of 93 and mkt in a range bound mode..
[15:06] <CM> new bull channel http:// (link removed)
[15:30] <CM> outlook for tomorrow: run day (mon) range day (tue) run again day (wed) bias still long.. 1220 upside
[15:50] <CM> pa at bottom tl of channel

OVERSOLD BULL DAY

Comment from last evening:

[18:06] <CM> nice gap open across the mkts. will be nice to recapture es 1180.s early in week and a run to test 1200 later.




The markets were oversold and the evening open had a nice gap.  We have a strong support now above the 1180 area, and still favor a run to test 1200.    The bull should be able to retake that level.

Important comments are on the chart today.

PA BREAKOUT-EMA BREAKOUT

ES TODAY:

• The ranges will give a read on the PA direction{  Bull, bear, range bound day.
• Short bull FBO, long bear FBO.
• Short/long the range runs.
• Short/long the BO's or wait for the EMA range.
• Look for 50CB's;  very important.

Today the PA failed to break long and reversed the range for a short.  A 50CB developed at B6.  B8-9 failed to break and moved lower.  That 50CB level became important for FBO's later.

Look for shorts at the BO or wait for the EMA cross ( B11).  Testing this, the EMA cross bar will produce a range to consider for the short(lower BO) or long (upper BO).  Today was a short, and the area to consider was shorting 1167.25-1167.5.

B17-19 were EMA FBO's and a short area, as was the failure of bars31-33 to break the EMA-Cross (67.25-67.5).

Two FBO's were shorts or wait for the break of the EMA-Cross line.

Trade the set-ups, and trade with the market bias.  Today, short...

DOUBLE TOP WITH A BEAR TL

The range data provided for the 6E and ES remained unchanged over night due to range bound PA.  To read the 6E (or any chart) the ranges find 1- strong bull; 2- strong bear; and 3- a transition range that can be played long or short.

Traders will enter at the lower range if PA is showing strength.  The thought is that the bear failed to sell.  Entry can be via a bar or the EMA.  Secondary entries are at the middle range and the upper (reverse action if bear run).  Note PA will always break first.  The logic for a strong bull/bear is the crossing of the EMA into the Upper or Lower trading Range.  In this example today, the bull trend had developed from the lower range  (about 90 ticks) and was still a strong long at the upper range- about 50-60 ticks.

THE ES

The ES had a double top in over night action ( pre US Open) and was in a bear trend reversal at the open after hitting the BO-5 and nearly the BO-10 level.  Those DT's were at the mid range, forecasting a range bound day at best, or bull sell off day at worst (only for equities and longs).

The focus of these post have changed to direct your attention to key levels, key PA that is of interest.  I do not list (although guilty in the past) the + of the trade(s) as each trader will have different results.  Some hold for ticks. some points.  Some trade bar signals/set ups.  The important thing is to look for the reasons to trade /exit.  Nothing else is important.  You will develop your own needs with each trade.

 In a strong trend, the TL can offer entries you should practice/execute.  Those came near B6 and B13 today.  For an Rth trader, it would be a lower high for B13.  The TL was seen with global chart, thus the preference at the open.

A reversal long began a bull run ending in a flag pattern followed by a descending triangle, all near/at that bear TL.

The failure to return into the range at the descending triangle was a good lead in for the PA cross of the EMA and bear TL for another BO-5 to BO-10 run.