An Exercise in reading Market Context and ABC Bullish Pattern Trade

December 17, 2012 · Posted in ABC Bullish, Fib. Zone Pivots, Market Structures, Point of Control · Comments Off on An Exercise in reading Market Context and ABC Bullish Pattern Trade 

S&P Eminis (@ES) developed a Globex range (overnight) of 1409.25 to 1417.25 and started drifting lower at the open. At 9.30am, I was looking at ABC bullish pattern strongly trading over Mid Fib. Band and 200-SMA. Reached its first target 1416.25 (over night). I did not have this opportunity as it developed ABC pattern and reached 1st target overnight. Strong ABCs usually gives second opportunities from with strong market internals. One of the first reading I look is Market Context and where the ABC was developed and how current Pivots (Floor, Globex and Fib. Zone Pivots) are in relation to Fib. Bands and 200-SMA. This gives a pretty good idea of Market Context and how I should play. Also needed to look at Volatility to see it is safely tradable.

At the open 9.30am, ES started drifiting downwards and entered into the tradezone (EL to Stop) 1412 to 1409.25. Also, price seems to be strongly supported by VAH (Value Area High: 1411.75). Another context reading was, there was a small ABC (3) was developing inside the larger ABC (5) giving cluses of potential breakouts. This is an excellent trade setup. My plan was to wait until it trades at or supported by VAH (411.75) and then rises over pHI
(1413) and R1(1413) cluster. Smaller ABC entry was 1413.5. I also thought if ABC does pickup momentum, it will reach next Fib. Zone Pivots Ranges (100% Resistance area: 1416.75 and second FZP Resistance Zone (1419.5 to 1421.25).

Market VLTY at the open was above 50, but nearing 50 and may drop below as price starts to settle. If price crosses above 1413.5, ABC Bullish setup will take it to 62-79%. With 2.5 to 4 pts targets and 2.5 pts stop is well within my Trade plan.

So, my entry was set at 1413.5 (above pHi/R1 Cluster). STOP was derived from this logic. Larger ABC stop is at 1409.25, but if price starts to decline below 200-SMA and this trade and ABC may be influenced by negative momentum. So, I placed my stop safely at 1411 (-2.5 pts). Targets are derived with Price confluences of ABC 62%AB at 1416.25 (+2.75) and 79%AB at 1418. (+4.5).

My ABC Bullish Long trade from 9.36am to 10.10am worked out well and I am out of trade at 1418 with 2.75 and .4.5 pts profits. At 10.30am, Price retraced back to 1414 level.

I still think price will reach FZP Target range some time today (1419.5 to 1421.25). But I will wait for another opportuntiy with some positive price-action to
trade.

Perfect ABC with MSL

January 13, 2010 · Posted in ABC Bullish, Fibonacci Bands, Floor Pivots, Point of Control, PriceProfile · Comments Off on Perfect ABC with MSL 

Jan. 13, 2010

This morning Es continued its Perfect ABC pattern from yesterday’s late-rally. Yesterday’s low (1127.75) was made outside the Fib. Bands. The ‘B’ pivot was made above the Mid-Fib.Band. A 83% retracement into AB produced ‘C’ pivot at 1128.5. These three pivots formed a ‘Perfect’ ABC Bullish pattern. The ‘A’ pivot is also strengthened by the Market Structure Low (MSL) pattern.

The Perfect ABC targets were at 100% of AB (1133) and 162% AB (1135.75). Prior to the open, ES was trading near ValueArea High and pHI cluster (1137), and this may be first resistance area.PerfectABC_Jan1310

ABC Bullish
Fib. Bands

Globex Pivots
Floor Trading Pivots

PriceProfile
Market Structures