S&P Daily Pre-Market Prep 5/5/17

Posted by Peter Davies on May 05, 2017

 2017-05-05_16-02-02.png

Well that week sucked. Certainly in terms of range but if you were watching the range and profiles, we actually had good opportunity on most days.

Let's just repeat the recap of where we are. It's been the same each day this week as we've been in the same place each day....

Quoting 
We are at the top of the range, not hit the top yet but this is a line in the sand. So we have to look out for a headfake up, a reversal down from here OR a break of the range upside and a move up to new highs.

Which is saying it is going to go up or down.

Headfake - will pop the top and see absorption and sellers piling in
Break upside - will see a move up without the stopping volume we see in the headfake, for me the safest option is to go long when it falls back to the old high
Reversal down - any downside move with overwhelming volume

So while we are saying "it will go up or down" - we do have some things to look at for confirmation of which scenario is playing out.

In terms of "which prices to trade" - well - it's anywhere around here. No specific price, just specific action to look for.

 

2017-05-05_16-02-25.png

The range filled out some more yesterday, so the chop zone is now 2381.25 to 2387

2017-05-05_16-02-36.png
 
Yesterday we had the chop area at 2381.50 -> 2387.25. We opened and went 2 ticks through the high of the chop area before reversing down to 2381.25, 1 tick below the chop area. We then moved up. So those were our early opportunities. After that we had a drive down towards the weeks low, failed to get there and popped up again.

So while it was an ugly day, we had some good places to enter.

Today, same deal again - no trades between 81.50 and 87.25, presume the range is holding, be on the lookout for a break. Note though - that when we range like this all week - Friday is usually pretty poor.

Plan
- Low expectation day
- Waiting for a break - whether that's today or in a number of days time, it's hard to know.
- At a major inflection point at the same time, so wary of headfakes
- No trading between 81.50 and 87.25 unless it's off the open
- A wait & see day - there's going to be good opportunity when this breaks, so waiting for that

Weekly Numbers
Range - 2375.50 -> 2390.75
Value - 2381.75-> 2386.75
S1 - 2365.75, R1 - 2394.75

Daily Numbers
Range - 2376 -> 2387.75 / 2390.75
Value - 2381.75 -> 2386.25
Globex 2379 -> 2387

Settlement – 2385.50

Today - 2381.50, 2387.25

Long Term Levels - 2178.75, 2129.50, 2099.75, 2084, 2078.75, 2000.75, 2400
 

Jigsaw-trading.png 

 

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Topics: Market Updates