ES Trade Plan for Tuesday Jan 28 2014

No trade today because frankly it just didn’t feel right. As I was thinking about why it never felt right, even though I had identified the entry point in yesterday’s post, is because on the day after a big move, the market is trying to figure out what it wants to do. My ES trade plan is predicated on having a strong sense of the areas the market wants to explore. Today, we actually explored the low 70s to high 80s, but I think we could have just as easily retraced Friday’s losses or continued down into the 60s to explore there. Now that we’ve established a new range today, I think I will feel better about tomorrow.

Today we put in a 25 point range – 1767-1792 with the bulk of that spent between 71 and 88.50. I feel relatively safe putting our support at 67.25 and resistance at 88.75. Abpve resistance, our next major line is the BRN at 1800, then about 1810 – nice 10ish point ranges. Below 67.25 we have what looks like the 61 neighborhood. Not as much space down below, but then the next meaningful support is at 1730ish. The 60s still need to be explored, as do the 40s.

Tomorrow’s Plan

If LONG is the trend:

I will look to get LONG at the high 80s with a Target 1 of 1800 and Target 2 of 1810. That would be about a 30 point trade, but I will not risk 10 points for it. I think 1800 is very possible, so I will limit my risk to about 3.5 points.

I will look to get LONG at the high 60s with Target 1 of about 15 points and target 2 of 1787.50. That will be a 20 point trade so I will risk 6 points for this one.

If SHORT is the trend:

I will get SHORT at the high 1780s with Target 1 of 15 points and Target 2 of 1767.

I will get SHORT at the high 1760s with Target 1 of 1761. Target 2 will be the rest of an ATR, which currently stands at 23.50, Target 2 will be adjusted depending on the high of the day.

The risk amount for both trades will be no more than 1/3rd the expected profit.

I will give both trades at least a couple of days to pan out. If I get filled but hit no target, I will re-evaluate late tomorrow.

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