Trading plan for Apr. 7, 2015

150406-ES-dailyMonday was pretty wild. Over the long weekend traders sold ES in reaction to the lackluster jobs report last Friday. But after the market opened Monday investors decided that bad news – the Non-Farm payroll report – was actually good news if it persuades the Fed to delay a rate increase.

The ES recovered all the overnight loss and ran furiously up to last week’s high area and stalled there for a quite long time before pulling back for the close.

Strong momentum was triggered when ES moved above 2065. But the volume was lower than last Thursday’s volume. Today we want to see some follow-through. If we don’t, it could send the ES back to yesterday’s globex low area again.

The 2065-62 zone should be watched very carefully. Remaining above it could encourage the shorts to cover and push the price back up to yesterday’s high level 2080-82 or higher up to 2092.75-95.50 (short entry).

A failure to hold above 2062 level and a break below 2059.50 could lead to a strong sell-off toward the 2050-46 zone (long entry) or lower.

There is not much fundamental change from last week to this week. About the only change is in the Street’s perception of what the Fed is planning.

Paid members, download the full trading plan, with the buy/sell numbers, here: 150407-plan