Taking notes: Market update $ES_F

I´ll look to post more frequently the evolution of my views during this week. Today, I have found out that  yesterday´s post wrintings were quite helpful today. 

I´m not really sure about the underlying reasons for this, but at some point I feel it is related to the note´s I used to take in class, beign at shool, conference or whatever interesting I was exposed to. 

Thus, I´ll try to figure out if this was a mere concidence or some permanent addition to benefit my trading. Over the last few months, I have taken and put into practice some measures which, at least for now, have increased my efectiveness and consistency.

Part of that, has been taking notes of almost everything It reaches my attention during the session, keeping record about my performance in a separate notebook, writing ideas, thoughts, feelings and everything else in between.

I´ll try to draft some of my ideas in the form of Q&A´s. I will not focus on the longer-timeframe, but on todays´s events.

– It is important to note that I´m favouring an end of year rally, although the stance is based more on fundamental/experience/gut feeling than techhinal analysis, strictly. However, it is also important to stress out that, personally, I´ll be watching what price action is telling me. I rather make $$ than being right.

I´m still favororing this view. However, keeping an open mind has been the main theme of the last few weeks, in which technicals were clearly affected by the news coming out of Europe. Too much headline risk at the moment dicatates the mood of the market.

– The daily view, shows than the S&P500, represented by SPY, has breached the resistance levels of 122 & 124 and currently sits in the pivot point of 126,as marked in red. That is my line in the sand. A clear break out of the trendline and the 1261 level would favor the bull case, with 1291 (already tagged before) and 1313, finally. Conversely, 1220 & 1240 are currently working as support. a clean break below 1220, would further strenght the bear case.

The S&P retraced 12 points today, almost 1% – The gap from last Thursday has been partially filled – We´ll see how the market reacts. There are some  that state “if a gap has been left partially filled, it means the move it is quite strong”. We´ll see if that verifies in the following days. I don´t really know is this has been statistically proven, but just throwing it out there. Lack of volume today, althought that doesn´t neccesarilly means what used to be in terms of participation, as we have experienced previously.


– What is keeping me cautios to the long side are the invenotry levels I´m watching. The chart basically represents the short and long commitment over a period of 3 weeks.Although the market can rally further, there are still short inventory commited to their positions at different levles. This doesn´t neccesarilly means that those shorts can bail-out of their positions, which can happen anytime, ingniting a rally, but what -as noted before- makes me to be cautios of having a complete upward bias. Since this is shown in real time, I´ll be watching these levels during tomorrow´s session and will update the levels of inventory and price action, tomorrow night, in order to track the evolution of the index.

The divergence in orderflow pointed out on last night´s post, finally played out. Not only the levels of short inventory established at 1250 aprox. are still committed to their positions, but also now there´s one more level that is need to be breached in order for the index to gain some upside – at 1270-, which were added/newly committed last night. Longs from 1245 are commited/holdng their positions at the time of writing, 9:35PM, ET.


Thus, after today´s move, we have a fairly balanced market between the 1256-1244 range. Currently, I´ll be looking for a break of the range, along with the committed positions, either long or short, which will most likely lead to a breakout of the range.



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