TRENDS, LEVELS, and RULES PART 2 7/3/13

HOLIDAY, early close in the market.

[08:43] <CM> levels today:  1605.5-1600.25-1598.5
[08:46] <CM> dashed lines from yesterday (screen shot deleted)

With all the PA thrashing and constriction it was easy to see shorts at every turn.

[09:28] <CM> range run complete with a slight gap to the LB  pa at SB area for the open negated prior news.

[09:32] <CM> sb to ema b1 current range
[09:32] <CM> look for a reversal long
[09:35] <CM> ema  a long break  sb for short

Well, the EMA was the friend today as PA finally ran the range and broke to the BO-5.

• When a level fails, we look for a PB to the prior. 
•  If at LB/SB we look for a range run.
• If LB/SB fails, we will likely see a run in the opposite direction followed by a BO  at the opposite.
• In a trend trading day,  we often will see a BO-5 to BO-5 range day.

TRENDS, LEVELS, and the RULES 7/2/13

HOLIDAY on the horizon and a well deserved break.

[08:49] <CM> ranges today  1609.5-1606.25-1604.25

The day started with  what appeared as a reversal off the Short Bot (SB) followed by a range run and Long BOT break out to the BO-5 .  The run was supported by 50CB's and 50CB Trend Lines.  The gap to the EMA was nice too!

 We also like to see the big boys get their targets.

[09:44] <CM> 8:30 reversal buyers  +8  1613  +10  1615

PA was showing signs of an exhausted run as we continued to gap to the BO-10.  By B32 we had a short alert as PA created a 50CB, broke the EMA and a prior 50CB TL.  All positive for a trade with  a known risk to the upside in the 17.5-18 area.

Targets for the selling were set at 12.75 (target 1  T1) and 10.50 for T2.  By rule, when a level fails we tend to expect a return to a previous level.  BO-10 reversed to BO5 and BO5 likely would reverse to the LB at 9.5.

The selling actually ran the original range back to a SB BO and test of the magical 1600 area.

REVIEW OF THE LEVELS 7/1/13

Quick review on the levels.  Levels were in prior to the open and we had a bull bias with some early news. 

[08:17] <CM> current es  1610.5-1605.5-1602.25

[09:03] <CM> 9am buys all majors  ym es tf nq

[09:22] <CM> news   push higher

[09:33] <CM> 13 area roughly +20 off support noted last evening around 93


[09:50] <CM> pb held at lb  bo-5 likly now 
[09:56] <CM> bo-5 on news

[10:18] <CM> can see a pb to prior level bo5  have 2 50cb levels as well  (link deleted)


[11:27] <CM> bo-5/50cb held  new selling noted at hod test (near bo-10)   (link deleted)

B1 developed a 50CB and PA held at the 50CB and the LB.  The minimum expectation on a level break out is a +5 run.  At the BO-5 we saw another 50CB suggesting another level BO to BO-10.

When a level fails (or we see a PA stall) we look for a PB to the prior level.  BO-10 was a FBO and PA broke both of the prior 50CB TL's and the actual 50CB.  With PA EMA negative, we expect selling into the range and look for a range run to the opposite level.

[11:41] <CM> ema sellers
[11:44] <CM> consider 1617-17.5 now

[11:50] <CM> move to 18
[11:50] <CM>   3m ema