Tag Archives: GPZ

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Trade Plan and Analysis for the E-Mini S&P 400

The E-Mini S&P 400 has rallied nearly 50 points since the impressive reversal near 950 early last week, which has led to great “buy the dip” opportunities. Here’s how I see tomorrow’s market playing out, along with my trading plan..

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Golden Pivot Zone

The 5-minute chart of the E-Mini S&P 400 futures contract shows a Higher Value relationship has formed using the pivot range. This relationship is the most bullish relationship, and usually indicates that any morning weakness into the range will be seen as a buying opportunity by responsive buyers.

However, what makes this Higher Value relationship more powerful than normal is the fact that it also contains the L3 pivot from the Camarilla Equation, which is typically seen as the “buy” pivot. When a Camarilla pivot lies within the pivot range, a major source of support is present, which I affectionately call the Golden Pivot Zone (GPZ).

The GPZ offers a super strong “zone” of support. A GPZ is a great source of support for various reasons, the first of which is the fact that the zone was identified as support using two different pivot-based formulas, thereby introducing true confluence.

Also, the call-to-action to buy at the support zone is greater, since traders of Floor Pivots and traders of the Camarilla Equation will essentially “double” the buying interest at that zone of support.

The Trade Plan

Given the recent run of strength and the Higher Value setup, I’ll be looking to “buy the dip” in the MCM2 tomorrow, so long as price opens above 995. If price opens above 995, I’ll be looking to buy into morning weakness between 993 and 994.5.

E-Mini S&P 400 ($MC_F)

The fact that the MC has a current 10-day Average Daily Range (ADR) of 14 points means that I’ll be looking to trade to a target of between 1,003.5 and 1,005, depending on where the morning low is located, essentially using 75% of the ADR. Obviously, I’ll update this soft target tomorrow morning after I see where the market printed the overnight high and low.

If price opens the session below 993, all bullish bets are off. If this occurs, I’ll look to shift my entry to the short side, with entries set to between 994.5 and 996, and a potential target somewhere in the 986.5 to 988 zone.

Let’s see how this one plays out!

Cheers!

Frank Ochoa
PivotBoss | Own the Market

Follow Frank on Twitter: http://twitter.com/PivotBoss

Back in the Saddle

I’m back from Spain! It was a fantastic trip, but I’m ready to jump back into the saddle. Here are my quick thoughts on what I see in the S&P 500..

Bullish GPZ

In the last blog entry I wrote before I left (THIS ONE) I mentioned that a near-term retracement could be seen in the market, which could offer a buying opportunity. Since a bullish GPZ had formed, the market was bound to test this zone before rallying to new highs, which was indeed the case. Most major indexes either tested this zone or came within mere points of testing it, before launching to new highs.

S&P 500 ($SPX)

As a matter of fact, the S&P 500 came within 3 points of testing the zone before rallying over 50 points. Impressive!

Stalling

The market has now stalled at highs over the last three sessions, which means we could see a breakout scenario ahead. The 15-minute chart of the S&P 500 shows price is coiling and has a very narrow value area for today’s market. This could mean a trending session if Friday’s range is violated early in the day.

S&P 500 ($SPX)

Since the market has trended steadily higher the last two weeks, look for a potential downside move out of this range. Keep in mind, however, that weakness has opened the door to buyers over the last two months. Therefore, a sell-off should be fleeting, as most market participants will again see a retracement as a bargain-buying opportunity. This has been the pattern the last two months and will continue to be the pattern until it is broken.

Long Term

The S&P 500 continues to remain very bullish above the long term fulcum level of 1,130. This should continue to remain the case, even if a longer term retracemet occurs. The market looks determined to test 1,200 and even rise as high as the year’s high at about 1,220. Therefore, look to continue to buy weakness as long as the market remains above 1,130.

Let’s see how this one plays out!

Cheers!

Frank Ochoa
PivotBoss.com

Follow Frank on Twitter: http://twitter.com/PivotBoss

A Weekly Outlook for the $SPX

The S&P 500 Index ($SPX) has been trending steadily higher since 1,040, rallying over 100 points in the last four weeks. However, price is beginning to show signs of weakness, which could lead to a near-term retracement soon. Here’s my outlook for the week..

Outside Reversal

Two sessions ago, price formed an Outside Reversal candlestick pattern, which is a highly predictive pattern for calling reversals. Essentially, price tested the waters above 1,150 and wasn’t able to find buyers. When no buyers were found, sellers entered the market and pushed price lower the rest of the session.

This candlestick pattern could offer an indication into future price movement. If buyers did not enter above 1,150, price must drop in order to find buyers. A drop back to prior resistance at 1,128.75 could fit the bill, but a move to 1,103 to 1,112 could also occur.

Inside Day Relationship

The $SPX has also formed another Inside Day relationship, which can offer excellent breakout opportunities. A breakout from Friday’s range (1,151 and 1,139) could spark the next 3- to 5-day move in this index. Watch this range closely.

S&P 500 ($SPX)

Golden Pivot Zone

For those of you that have bought my book, Secrets of a Pivot Boss, you know that the Golden Pivot Zone (GPZ) is one of the most powerful pivot combinations in technical analysis.

A bullish GPZ has formed for the month of October. During a bullish trend, you will usually see price test the GPZ before moving higher. However, since price hasn’t retraced yet, we will be using the GPZ as a near-term target for the potential retracement. Since the GPZ spans from 1,103 to 1,128.75, look for price to drop in this range some time this week. Although, the center of the range usually offers the best zone to watch for a test (from 1,111 to 1,116).

If this range successfully withstands the retracement, we could see another round of buying to new highs during the current price run.

Let’s see how this plays out!

Cheers!

Frank Ochoa
PivotBoss.com

Follow Frank on Twitter: http://twitter.com/PivotBoss

Is the $DJI Poised for a Rally?

The Dow Jones Industrial Average ($DJI) has dropped over 500 points the last week of trading, but is beginning to show signs of strength. Here’s why I think we could see a rally ahead for the Dow.

Pivot-Based Support

The daily chart shows the Dow has dropped right into a major area of pivot-based support, which I call the Golden Pivot Zone (GPZ). A bullish GPZ forms when the L3 Camarilla level is found within the boundaries of the pivot range. During an uptrend, any pull-back to this area of confluence is seen as a buying opportunity.

As you can see, buyers entered the market en masse yesterday when price approached the center of the GPZ, as price tested the monthly pivot point and then reversed for a 100-point rally to finish the day.

Dow Jones $DJI

If buyers continue to find value in this area, we could see a short term rally back toward 10,600.

Bullish Hammer

The daily chart also shows price has formed a bullish hammer candlestick pattern after testing the GPZ. This candlestick offers visual confirmation that responsive buyers are indeed entering the market. Also, this type of pattern has a habit of forming at the extremes of trends – just look at the top in June!

If we see a close above the high of the hammer at 10,335, we could have enough confirmation to ride the move back toward 10,600 – and potentially higher! This form of confirmation is important. Otherwise, a failure back below 10,200 will indicate more selling pressure ahead.

Let’s see what happens!

Cheers!

Frank Ochoa
PivotBoss.com

Follow Frank on Twitter: http://twitter.com/PivotBoss

Action Levels for the ES

After Friday’s decline, the ES could be on the verge of much more selling pressure ahead. Take a look at the action levels that I’ll be looking to play today.

Since Friday’s market may have triggered a new short term downtrend, I’ll be looking to sell into any early strength today. Namely, any move into the 1,070 zone offers a highly confirmed area to become a responsive selling participant.

E-Mini S&P 500 $ES_F

Looking at the 15-minute chart of the ES, you’ll notice that the H3 Camarilla pivot will be roughly 1,070.75 for Monday’s market. Moreover, this pivot level resides within the day’s central pivot range.

This combination of pivots within a trending market can offer a huge area of support or resistance, which is why I’ll be looking to sell the market if price reaches anywhere from 1,066.25 to 1,072.75 – and especially the 1,069.50 to 1,070.75 zone.

If price reacts to the 1,070 area, then L3 becomes the target to watch at 1,055.50, which could be reached anytime in the next two days.

Keep in mind that Friday’s wide range of price movement could lead to a day of trading range activity. However, if price continues to seek lower value, these action levels could prove profitable.

These are my action levels to watch…what are yours?

Let’s see what happens!

Cheers!

Frank Ochoa
PivotBoss.com

Follow Frank on Twitter: http://twitter.com/PivotBoss