Happy Breakdown New Year

Happy New Year to all.  It was a nice break for all I hope and we kick the year off trying to get a feel for what the trends will be, what the setups will be and what will change vs. 2010.

In following some of the best writers at Minyanville, Tickerville, etc. it seems like a good way to summarize is this – we should see more of the same government infusion-driven markets until June, and the 2nd half might bring a change in character.

Nobody knows what’s going to happen, sure, but it’s a good backdrop to work from, even if there are daily selloffs to bring the markets back to a fair value.

Today’s action is a good example, as long as one had the patience to wait for the right setup.  Markets gapped higher and continued on to the R3 pivot at 1,272.50 just before lunchtime.  It was unlikely that there was much more upside at this point, and they consolidated through lunch.

Even though Mondays are not the best day to trade, this was a nice setup for a “breakout” trade.  Once 1,270 (Blue Line) there was a struggle, but eventually the longs gave it up, and most of that action occurred in the last hour of trading.

With proper risk management (size and scaling out) this was a great setup – and 1,270 then became resistance.  Not a huge winner, but these are the kinds of trades that do lead to high probability winners and why I continue to look for the “extremes” when entering a trade.

Pivots for the ES tomorrow (positive bias):

  • R2 -1281.58
  • R1 -1273.42
  • Pivot -1264.33
  • S1 -1256.17

Again, Happy New Year and let’s kick some ass this year….whatever the markets give us.


About thefront9

Independent trader with a flexible approach to the markets. Position trading, swing trading and day trading using Futures, Equities and Options. This site is intended to help others (and myself) see what I see and to stay true to the discipline of making trades at the extremes. Contrarian and TastyTrade addict! Living in Texas with my family, helping others and maybe playing some golf from time to time makes life busy and great. Add a little music and humor and that just about sums it up. Trade the extremes and manage risk.....always!
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