Thursday, September 20, 2007

Plan for Quad Witching Day, Sept 21, 2007

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ES Resistance @1540-1542, 1546-1550
ES support @1505-1509, 1485-1489

POC=1537.5 (2-day up trend)

Open gap @1490 (9/17)
Open gap @1467 (9/10)
Open gap @1450 (8/28)

I think I just missed out on a good opportunity to hold ES for an overnite trade. ES triple topped today at around 1541, and then dropped for the remainder of the session. I think we will open tomorrow with another gap down, and likely end the day in the red. The FOMC breakout from Tuesday is looking like a magnet right now; I think we will see a retest of that breakout level, if not tomorrow, then sometime next week. The plan for tomorrow is to sell at resistance.

The one possible problem is that we could see a 50% retrace of the down move before going for the re-test. Also, ES chopped around in a 4pt range for much of the morning session before dropping in the afternoon session. With tomorrow being Quad Witching day, we could see more swings and false breakouts.

Here are charts of some other markets that I am watching now:

Natural Gas



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