Tuesday, October 09, 2007

Plan for Wednesday Oct 10, 2007


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ES Resistance = ????
ES support @1570-1573, 1559-1562, 1542-1546, 1529-1534, 1516-1520

POC=1567 (2-day uptrend)

Open gap @1552.5 (10/4)

The trail of open gaps since September presents compelling evidence that this market is doing what everyone least expects it to do - rally. Sure, we have oversold conditions, but it has been like that ever since the FOMC breakout and there are no signs yet of a break in trend.

Today was yet another breakout to all-time highs in the cash index. I think we will see a test of today's afternoon breakout. The 1570-1573 support level that I've identified isn't a true support level, since there has been no test of this level yet, and I have a hunch that tomorrow we will see that test. The 7am reversal might be a good way to play the test of the breakout.

The afternoon session could go either way. The only way to play it would be to look for the volume spikes - a second volume spike in the same direction would be the tell.

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