Homework for Friday 2009.01.09

8. January 2009
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ES - The support and resistance levels yesterday worked out beautifully!  Tomorrow will be another good test.  I added a "strength" indicator to my homework script (see asterisks next to level).  This lets you visually see resistance levels and their relative strength.  I have a feeling I will be tweaking this in the future.

From the output below, you can see there are stronger resistance levels above than there are support levels.  However, always keep in mind, nothing in trading is 100%.  Does this imply more downside?  We didn't see as much downside as we were expecting today, and in fact, saw a rally into the close.  As of this moment, I am keeping the same plan as I had yesterday: look for a rally to 912 or 917.25 for a short to 887.75 or below.

One thing the script doesn't show is if you take the high of 2009.01.06 (942.75) and the low of 2009.01.08 (891.50), the middle point is at ~917.  This happens to be one of the points we are looking to rally to!  Another point of confluence and thus resistance.  

 

ES Update:  Based on the homework above, this is what the market has done so far.  Go Technical Analysis!
 

 

 
 
6E - The Euro.  I primarily focus on the ES, but I want to test out my logic and method from the ES on the Euro (6E).  Below are the results from that.  I haven't done a lot of testing, so I can't speak for the validity of these numbers.  However, I do see the 1.3770 level listed that proved to be an important one for Thursday's trading.
 
Good hunting!
 

NOTE: Updated homework (12:30 CST) 

 
 

Homework

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