1/31 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1468.75.

On a more short term basis my bull/bear line is 1491.

Areas to do business today

Buy: 1490.75, 1481.50, 1476.50

Sell: 1501.75, 1504.50, 1509

Gaps: n/a

NVPOCs: 1467, 1473.75, 1490.50

• Even with sellers coming in late in the day value and VPOC were relatively unchanged. Until we start to see value moving significantly lower it is safe to say that buyers are in control.
• 1498.50 will be the key for today. Great confluence of yesterday’s VAL at 1498.75 and the LVN at 1498.50.
• If we open below and see sellers reject that area the downside targets would be yesterday’s lows of 1495, the 1491.25 LVN and 1490.50 NVPOC.
• If responsive buyers step in and push us above 1498.50 the objectives will be 1502.25, 1504.50 and 1509.
• Lots of traders have been calling out the 1487 area as an area for a bounce. I agree that buyers could step in there. I’m just not confident enough in that are to put money on the line at that level. Below that the important levels will be 1481.50, 1480.75, 1476.50 and 1473.75.
• Today is Non Farm Payroll day. Translation: everything I just wrote could potentially be thrown out the window come 7:30am when the jobs number is released. The ideas above are still valid but it is also important to note the other support and resistance areas in the chart below.

Other support and resistance areas are outlined on the chart below.

1/30 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1468.75.

On a more short term basis my bull/bear line is 1491.

Areas to do business today

Buy: 1502.25, 1498.5, 1490.50

Sell: 1509, 1514

Gaps: n/a

NVPOCs: 1467, 1473.75, 1490.50

• Value and VPOC pushed higher once again. VPOC above key 1500 level.
• 1498.50 and 1502.25 are my keys for today. If value is going to move higher 1498.50 will need to hold. If the 1502.25 HVN and 1501.75 VPOC can hold this could indicate buyers are eager to explore higher.
• Upside objectives are 1509 and 1514.
• If the market pushes below 1498.50 the objective for sellers will be to push below 1496 and 1491.25
• The market has been up 10 days in a row. Just remember, while nothing lasts forever some things can last a lot longer than you expect. Just simply know what needs to happen for the market to go down and what needs to happen for it to go up.

Other support and resistance areas are outlined on the chart below.

Market Analysis: Yen

Yen futures are in an absolute nose dive right now. There have been tons of traders who have been warning about the fact that Yen futures aren’t really that oversold if you look at it on a long enough time frame. I agree with that. However, it doesn’t mean that you can’t play for a bounce.

If you are up for catching a knife here’s how I would do it.

Lots of traders will be looking at this 50% retrace of the huge move from July 2007 to October 2011. I like that idea for 2 reasons:

1) On the move up there were clearly 3 high volume areas. Right now the market is in the middle of one. I think that if there are going to be buyers they are going to do it in a place they can clearly define their risk. The bottom of that HVN will likely bring about some responsive buyer.

2) The bottom of this HVN also lines up with the 0.010532 monthly low from May 2010. In between that area gives trades clear areas to build a position and define risk.

Obviously this is going against a lot of selling momentum. Sellers also know about these areas so they will likely try and power through them with some ferocious seller in those areas.

Targets for the potential bounce will be the 0.011000-0.011400 area.

1/29 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1456.

On a more short term basis my bull/bear line is 1468.75.

Areas to do business today

Buy: 1490.50, 1481.25, 1476.50

Sell: 1496.50, 1502.25, 1509

Gaps: 1496.75

NVPOCs: 1467, 1473.75, 1490.50

• Value and VPOC remained in the same area as Friday. A tight value area like yesterday is setting the market up to move in either direction.
• 1497 is the key for today. So far in the overnight trade we have seen acceptance below 1497.
• Below 1497 the objectives will be the 1490.50 NVPOC and the 1480.75 NVPOC.
• Above 1497 the objectives are 1502.25 and 1509.
• I’ll say the same thing that I’ve been saying for the past few days. There are plenty of objectives below the 1496.50 area, if the market pushes below the value area low we could see buyers step aside until some of the key levels below.

Other support and resistance areas are outline on the chart below.

1/28 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1456.

On a more short term basis my bull/bear line is 1468.75.

Areas to do business today

Buy: 1480.75, 1490.50, 1496 (only if from above)

Sell: 1496 (only if from below), 1502.25, 1509, 1514

Gaps: n/a

NVPOCs: 1467, 1473.75, 1490.50

• Value and VPOC again moved higher. Buyers continue to show up where they need to in order to push the market higher.
• Friday’s VPOC of 1496 should be the key for today. Above the 1496.50 LVN sellers have stepped up and push the market back below that key level.
• If sellers reject prices above 1496.50 the objective will be to close the 1490.50 NVPOC and try and push below the 1491.25 LVN.
• If buyers are able to push above 1496.50 then the two upside objectives are 1502.25 and 1509.
• Overall there are a series of NVPOCs all the way down to 1445.50 that will eventually get closed. I think the market could easily see a move down to 1465.75-1467 to close some NVPOCs and the 1465.75 gap in order to push to all time highs.
• Lots of smart traders are calling for a pullback right now. The bottom line is that now is not the time to become stubborn. Your approach to the market shouldn’t change because everyone is bullish or bearish. Know what needs to happen to go lower and what needs to happen to go higher and trade accordingly.

Other support and resistance areas are outline on the chart below.

Market Analysis: Crude Oil

At this point everyone and their mom (ok, not their mom because she just put her money back into stocks) is calling for a pullback. I would agree that a pullback is going to be needed to push higher. However, playing the game where I am continually waiting for a pullback is not a game that I like to play for a couple reasons. 1) I don’t know how to define “pullback”. If the market goes down 10pts is that a pullback? 2) Once you convince yourself to look for something that you can’t define you are completely screwed and simply won’t be able to take a trade.

Waiting for a “dip” is pointless if you don’t take the time to see where the “dip could stop dipping. Buying on a dip is simply a trendy way of saying “I’m going to look for areas below the market to take risk”. Let’s do that with crude oil.

Here is a 5yr weekly chart. As you can see we just broke out of a ginormous triangle pattern. Furthermore the market was able to push and hold above the 95.25 LVN. Both signs of buyers showing up where they need to.

One way to look at this from this moment in time forward is to ask this, “If the market is going to go lower before it goes higher, at what level do buyers need to show up? Each of the grey profiles represent a month of trading. The black profile is representing the last 180 trading days (both profiles include the Globex session).

Here are the key levels I see:

1) 94.70. High from 1/10.

2) 94.50. Where the trendline from 1/4 comes into play.

3) 93.75. Where the downtrend line from February 2012 comes into play.

If buyers want to buy at lower prices, those are the levels where they will need to show up. If prices slip below there then you have to hold the 93 monthly VPOC. The good news on a trade like this is there is plenty of room for prices to move up to 105-110. On the flip side, the market really could hold any one of those areas and take off. This makes defining where you are wrong on the trade a little harder. If you want to take this trade it will likely be a situation where you will want to trade smaller size to account for being wrong somewhere under 93.

1/25 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1456.

On a more short term basis my bull/bear line is 1468.75.

Areas to do business today

Buy: 1490.50, 1480.75, 1476.50

Sell: 1496.50, 1502.25, 1509, 1514

Gaps: 1440.75, 1465.75, 1490.75

NVPOCs: 1432.50, 1445.50, 1449.50, 1467, 1473.75, 1492

• Even with the selling throughout the midday value and VPOC both moved higher yesterday.
• The 1490.50 VPOC to 1491.25 LVN area should be key for today. Below it and the market will want to test 1486-87.25 and 1480.75.
• If the market finds acceptance at and above yesterday’s VPOC then the objective will be the 1496.50 LVN, 1497.75 high and 1502.25.
• The market will have to push to get through 1502.25 but the objective above that is 1509.
• The last few sessions buyers have showed up at either the previous day’s VAL and/or VPOC to push the market higher. If the market is accepting prices below those areas this could force a lot of trapped longs to liquidate their positions.

Other support and resistance areas are outline on the chart below.

1/24 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1444.

On a more short term basis my bull/bear line is 1460.

Areas to do business today

Buy: 1480.75, 1473.75, 1468.75

Sell: 1487.25, 1491.25, 1496.50

Gaps: 1440.75, 1465.75, 1490.75

NVPOCs: 1432.50, 1445.50, 1449.50, 1467, 1473.75, 1480.75

• The market was able to stay in the top half of Tuesday’s double distribution profile, move value and VPOC higher and hold Tuesday’s value area high.
• 1487.25 will be the key for today. Rejection from below of yesterday’s VPOC will indicate that the market wants to test the 1481.25 area. Acceptance of yesterday’s VPOC will indicate that the market wants to retest 1491.25 again.
• Be cautious about fading a move out of yesterday’s value area. Professionals are looking for reasons to sell and amateurs are looking for reasons to buy, never a good sign.
• Upside objectives are 1491.25, 1496.50 and 1502.25. Downside objectives are 1481.25, 1480.75 and 1473.75.
• It’s very important not to develop a strong bias right now. More seasoned traders seem to be anticipating a move to the downside and newer less experienced traders seem eager to buy any dip they are presented with. It’s ok to have a bias but don’t get married to that. Trading is not about being right at all costs, it’s about being right with a small cost if you happen to be wrong.
• Look at the painting we are presented with and figure out what is important. Only trade the areas you think will be hard for the market to take your money.

Other support and resistance areas are outline on the chart below.

1/23 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1444.

On a more short term basis my bull/bear line is 1460.

Areas to do business today

Buy: 1473.75, 1481, 1484.75

Sell: 1491.25, 1495.75, 1502.25

Gaps: 1440.75, 1465.75

NVPOCs: 1432.50, 1445.50, 1449.50, 1467, 1473.75, 1480.75

• Buyers were able to push above 1481.25 and press towards the 1491.25 and 1496.50 LVNs.
• We are probably in the last stages of the herd move towards 1500. I would look for responsive sellers to step in at 1502.25. Keep in mind that like most herd moves the endings can be semi random as you get a lot of panic buying at the top.
• 1484.75 Should be the key for today. Below that and the market will want to retest the 1481.25 area for buyers. If the market can stay above 1484.75 then the objectives are 1491.25, 1496.50 and 1502.25
• If sellers can push the market below 1480.75 then look for yesterday’s VAL at 1476 and the NVPOC at 1473.75 to be tested and closed.

Other support and resistance areas are outline on the chart below.

1/22 Plan

S&P 500

Who is in control?

Buyers are in control of this market.

What needs to hold for buyers to stay in control?

On a monthly basis my bull/bear line in the sand is 1444.

On a more short term basis my bull/bear line is 1460.

Areas to do business today

Buy: 1467, 1741.50, 1473.75

Sell: 1481.25, 1486.50, 1491.25

Gaps: 1440.75, 1465.75

NVPOCs: 1432.50, 1445.50, 1449.50, 1467, 1473.75, 1486.50

• Looking at Friday’s value area and VPOC references today.
• 1481.25 is a big level in the market place. That seems to be the big hurdle buyers will need to clear to push towards 1509.
• Very defined trading range so far between 1470 and 1481 in this balance area. If buyers are going to step in and make a higher low I think it would make sense for that to happen between 1471.50 and 1473.75. Anything higher than that is a sign that buyers are aggressively in the market.
• Above 1481.25 the objectives are to closed the 1486.50 NVPOC and then the 1491.25 and 1495.75 LVNs.
• Sellers will need to push back below the 1467 NVPOC for any chance at significant downside. Below that the objectives are the 1465.75 gap and 1460 LVN.

Other support and resistance areas are outline on the chart below.