Day trading the SP 500 e-mini

Outlook for the week of Feb. 12 – ESH7

1. Friday prices

2. Major support and resistance for Monday Feb. 5

3. Weekly outlook

Last week, ES made a new high with a series of contraction moves in the first four days; in the fifth day it sold off and wiped out the entire week’s gain.

For the short term, last Friday’s sell off was bearish, and the ES is likely to continue being bearish early this week. For the long term, ES still made a higher weekly high and higher weekly lows. On the weekly chart the current uptrend hasn’t been breached, which tells us this market is still bullish.

As long as ES doesn’t breakdown 1412 level, last Friday’s sell off should be treated as short term correction move. In addition this week is option expiration week. If 1437-35 range can be held up, it is likely for ES to have a back-to-back move within the 1455-1435 range.

Major resistance level for this week is 1455 and support level is 1425.

Weekly chart:

4. Daily outlook for Monday.

Last Friday, ES sold off dramatically in the afternoon, as we told our members it would. (Friday members were called short from the open, called short again after a brief spike at the 56.00 level, and remained short to the final target at 37.50). Short term market sentiment was changing from bullish into bearish tone, due to news from the sub-prime housing market and Fed musing about inflation. ES reversed and reached its H&S pattern breakdown target at the 1437 level.

Today we may see a consolidation move to balance out last Friday’s down move. As long as price can hold above 1437-35 range in the early morning, it is likely for ES to move up to retest 1449-50 range before it moves down again.

Daily indicators turn down and continue supporting short term bears. Bounces will attract more sellers to step in this market. But Sellers need to fight 20/40 daily moving average lines first before taking full control of this market.

Major resistance level is 1450.50 and support level is 1429.75

Daily chart:

5. Trading strategy for Monday, Feb. 12

Last Friday ES hit its H&S pattern breakdown target around 1437 level and bounced up to 1443 for closing. This morning we may see retesting last Friday’s low in the early morning. If 1437 level can be held up in the morning, price is likely to move back up to 1444-46 (Agg.SHORT) range, and later afternoon price may retest its last Friday’s first breakdown level 1449-50 range (SHORT). Our strategy is SHORT on bounce and Scalp LONG side if 1435-37 range holds. 

Today’s key level is 1445.25

6. Intraday swing position entry

short side: 1446.50 (agg.scalping) 1449.75-51.50 (agg) and 1454.75-55.50 (cons)

long side: 1437-35.50 (Agg.Scalp) 1430.75-29.75 (agg) and 1425.00 (cons) 

Intraday chart:

7. Results last week

What does this mean? See this explanation.

To see the trading plan for Tuesday, contact admin@naturus.com