2013-01-10

$ES_F : 1456-66 expected day session range

Expected regular trading session range for e-mini S&P 500 futures.

Bullish side to assert once again to breach resistance at 1460 area. 


I am still pretty occupied to devote to full time trading but I have started analysing the markets regularly. Since the new year/fiscal cliff resolution drama, the markets have set-up strongly on upside and provided the momentum can be maintained going forward, 1500-1526 looks like a reasonable target for the long side. Two things makes me cautious on long side however are


  • VIX is at multi year low and the term structure is steepening (predictably in anticipation of another drama related to Debt Ceiling in coming months).
  • The new year rally has so far not convincingly breached the 1460 resistance area, creating a double top, acting as resistance. 
In any case so far it appears that bulls are still in charge, even though lacking in volume and strength and day session trading range is getting compressed day on day. Yesterday marked the 5th day we traded within 7.5-12.5 point range  consecutively. Usually such compressed range result into a blow out and so far it appears it could be on the upside. 

I would expect continuation of move up from yesterday. The futures are pointing to strong open. I would expect the low of the regular trading session in 1455-57 area which is the support consisting of previous VWAP closes which are concentrated in this region. Expecting the usual 10 - 12 point day session range gives the upside target as 1465-67 area.