Premium Market Wrap 09.03.13

On September 3 I wrote, “watch 1650 to 1651.50 for signs of selling pressure, as the algos will target 1651.50 since it is the 61.8% Fib level of the recent swing move. If selling occurs here, this could be a swing high ahead of the next swing low…then watch 1642 for early signs of weakness. A break through this zone suggests targets at 1639.75, 1635.25, and 1630.50.”

It doesn’t get much better than that, folks. The E-Mini S&P 500 opened with timid strength this morning and rallied right into the 1650 level, which caught offers immediately. The 1650 level became the high of the day, and the ES dropped to each of the targets mentioned above except the last one, which missed by a tick.

We knew 1650 was the big level to watch because I had been writing about it as a program level since the ES broke below it a week ago. Today it delivered, to the tune of over $900 per contract traded in the ES. What a great way to start the new month!

Get to Know the E-Mini S&P 400

The ES was just one of many futures contracts that had great movement today, as the NQ, CL, GC, and YM all had great trading sessions.

But perhaps the best mover of them all was the E-Mini S&P 400 (EMDU3), which had 65 points of tradable moves today. Mind you, the EMD pays $100 per point, so there was $6,500 worth of tradable moves today…per contract. Unbelievable. I’ll begin to add more analysis for the EMD and other products down the road.

I already trade this product, but I’m definitely going to make trading it more of a primary focus.

Monthly and Weekly ADR Targets

Since today was the first day of the new month and week, all of the ADR targets below are new, with today’s high and low being logged as both the monthly and weekly highs and lows. These will be updated as new highs and lows are reached throughout the week/month.

Take a look at the table below and ask yourself which of the weekly or monthly targets have the best chance at being reached for each product, given the current trend and the technicals in the chart.

For example, looking at the E-Mini S&P 500, I know that 1650 was a very important level, which offer selling pressure that leads to new swing lows. As such, I should be targeting 1624.25 and 1615.50 this week, as these are the two weekly bear targets.

Obviously, if 1620 is taken out and we reach 1615.50, then much more selling pressure could be seen ahead. Therefore, taking a look at the monthly bear targets for the ES, which are presently 1591 and 1571.25, would be the right course of action.

Keep in mind, this “blueprint” for forecasting price movement works quite well, but it is also a moving target at times, since we’ll be updating targets as new highs and lows hit the market. So you must be fluid and flexible in your trading plan.

By the way, isn’t it amazing that Gold already hit it’s primary bull target for the week at 1413.20? I’ve known that was the bull target since 5am this morning, and that’s exactly what preparation can do for you.