The E-Mini S&P 500 futures contract looks poised for a huge Monday. Here’s what I’ll be watching tomorrow..
Inside Value Relationship
The 5-minute chart of the E-Mini S&P 500 futures contract shows an Inside Value relationship has developed, which is my favorite breakout indicator.
Friday’s narrow range of movement led to a very narrow Value Area for Monday’s market, which has formed within Friday’s Value Area, thereby creating the “inside” relationship.
When this pattern develops, you typically see a solid breakout opportunity that leads to trending price movement – either for the first few hours, or the entire day.
The Game Plan
If price opens the session outside the prior day’s price range, we will look to trade in the direction of the gap, with intentions of riding the move as far as possible.
If price opens the session within Friday’s price range, we must wait until a violation occurs before considering a trade opportunity.
Since the current 10-day average daily range of the ES is 30.5 points, we will likely see a move of between 30.5 and 38.25 points, since narrow VA days can lead to a larger price move than average.
In terms of a bullish target, the Daily chart shows a confluence zone at 1,313 that we will consider as a main target, as this level represents both a monthly naked POC and the current VPOC year-to-date. Judging from Friday’s closing price, a move to 1,313 would be a 30.75-point move, which is in line with our ADR target. Use 1,300 as a scaling opportunity.
If price breaks to the downside, look for scales at the following targets: 1,261, 1,253, and 1,248.25.
Volume Profiling Techniques
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Let’s see how this ES setup turns out!
Cheers!
Frank Ochoa
PivotBoss.com
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