The mini Dow futures contract has been very bullish over the last two sessions and continues to push higher after testing 12,000 earlier in the month. Given recent strength, here are my YM levels to watch for tomorrow’s action..
Buy the Dip
The 5-minute chart of the mini Dow futures contract shows price has rallied 250 points in the last two sessions, which gives us a very nice blueprint for trade setups tomorrow morning.
From the chart, you also see that tomorrow’s Value Area shows an Overlapping Higher Value relationship, which means continued strength should be seen, especially if price opens the session above 12,600.
If price opens above 12,600, look to buy into weakness between 12,560 and 12,600. Any pull-back to this zone could ignite a bit of responsive buying pressure, which could lead to a decent advance to new highs toward 12,700.
Contingency Plan
If price gaps below 12,550, however, this will indicate that market sentiment has drastically shifted, thereby painting a bearish picture. Should this occur, look to sell into strength between 12,550 and 12,585.
Remember, should any of these scenarios play out, we are looking to take advantage of the first key move of the day…either toward 12,700 (for Longs) or toward 12,450 (for Shorts).
Let’s see how this one plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
