Alright with the intro out of the way, let’s get to some trading. Let’s first look at the ES – e-mini S&P 500 (the easiest way to explain it is think of the S&P 500 as a stock on crack, thats the ES) Each tick in the ES is .25 points, and is equivalent to $12.50. The first few days I post charts I will clarify as much as possible since I know a lot of you who read this may be completely new to seeing these charts. To those of you who know all of this, I apologize it’s just temporary.

Currently we have what I call a spinning bottom (there are a ton of names for these candles, the names are irrelevant want the candle means is what is important). As you can see the ES dropped the previous two days down to the blue line which is the 21EMA (exponential moving average). The candle is green which means the market finished higher for the day, the simple way to read this is the body (the colored part) is green so we opened at the bottom of the green body. Sometime during the day the market sold off pretty hard and pierced through the 21 EMA, then buying pressure came in and forced the market considerbly higher up to the red line (8EMA) then the rally fizzled off for a small gain for the day. So you might say who cares? Obviously theres still a lot of selling pressure because the market couldn’t sustain it’s rally and it sold off pretty hard.

Well, this where the beauty of market pyschology comes into play. Since we have a long wick that pushes up to the 8EMA it shows that the bulls started to gain control and that buying pressure is now stronger than before. Simple supply and demand, the sellers are now finding more buyers than before – people are willing to buy at this price.

You will see where I put two green solid lines, that shows previous resistance now being support – hence why people are willing to buy at this level.

Now lets look at the weekly chart. I personally love the weekly chart because it cancels out a lot of the “noise” we get on the daily charts. On the weekly you’ll see where I outlined a spinning top candle against the 100% Fibonacci line. This means that at the resistance (previous high) there was mixed market sentiment, and a sell signal was triggered. That worked and you obviously see we are down for the week. We hit support at the 8EMA on the weekly chart, which was also pretty close to old resistance.

So using candlestick analysis I would consider going long for tomorrow based off the daily chart.

Now for the ever so popular YM – aka e-mini Dow. Each tick is 1pt, and that is $5 per tick. The YM is mostly a haven for newbie traders to day trade since there is less capital at risk. The “big boys” trade the ES. I prefer the ES because my setups tend to work better with that market.

Alright on the YM daily chart we have another spinning bottom, this time the market closed lower but that is still okay. What I particularly like about this setup is the close right on the 21 EMA. We have two even closes in a day showing support, this could also be called a tweezer bottom. The overall trend is bullish and I don’t like to fight the trend, another reason why I like the long side of this setup. I won’t post a weekly chart right now, since it looks pretty similar to the ES.

The NQ is next aka e-mini Nasdaq. Each tick is .25, and each tick is worth $5 (I believe). I really don’t trade the NQ very often, but I do like to follow it since sometimes it can be a “leading” indicator.

Overall there is a bullish trend that I wouldn’t want to fight. What is concerning though is the strong resistance over the last few days. I would wait to make any trades based off a close above or below one of those trend lines. A close like that would show either the bulls or bears are in charge.

Crude oil is the big discussion these days, after hitting record highs it truly affects everyones pocket book. Well, right now I think crude is going down and heres why. Over the last few weeks I have been announcing a target based off of Fibonacci numbers of $86.54 – well we just hit that number and broke through that line. Now we have a pretty clear doji at the top of that trend, so I would put a tight stop on my long position and re-enter after a quick pullback. A lot of people have the same target as I did, so they will unload part of their position and take profit off the table hence why I believe there will be a pullback. I will post a weekly chart at the end of the week.

That’s it for today. Tomorrow I will post more markets and we will see how how the YM and ES turn out. Again if you have any questions or comments, just send me an e-mail. Have a great day and good trading.