The Trader Daily

 | Jul 02, 2014 | 7:30 AM EDT
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For a holiday-shortened week, Tuesday's session was jam-packed with action. From Goldman Sachs' (GS) upgrade of  Netflix (NFLX), General Motors' (GM) better-than-expected auto sales figures and GoPro's (GPRO) continued meteoric rise, to the weakness in the yen, 30-year Treasury Bonds and shares of utility stocks, it offered something to please nearly every trader and investor. The only folks left in the cold were, as usual, equity bears.

Tuesday's advance wasn't only about a handful of individual stocks. The broad averages participated as well.

The E-Mini S&P 500 futures broke decisively through 1956. The E-Mini NASDAQ 100 futures continued their multi-session advance toward 3900. And the Mini Dow Jones Industrial Futures, the perennial laggard of the group, managed to break ever so closer to 17,000. Heck, even the Russell 2000 futures are trading back near their early-March highs. It's OK to dislike the price action. But as we've discussed for a while now in the Trader daily, anyone pushing a genuinely bearish thesis is doing so based on something other than price action.

Let's set aside this entire bullish hullabaloo for a moment and consider what's on tap for the remainder of the week. The ADP monthly employment report is released at 8:15 a.m., and Federal Reserve Chief Yellen delivers her speech on monetary policy to the IMF central banking conference at 11 a.m. On Thursday, a holiday-shortened session, both weekly jobless claims and the monthly employment situation are released at 8:30 a.m. Then, at 10 a.m., the latest ISM non-manufacturing index reading hits the wires. All markets are closed on Friday in observance of the Fourth of July holiday.

Of the events listed above, it's safe to assume that Yellen's speech and Thursday's employment situation report are likely to be the most market-moving.

Before we lay out Wednesday's specific trading levels, it's worth noting that Tuesday's profile displayed quite a bit more symmetry (readily identifiable unfair highs and lows) than one would normally expect to witness on a trend day. Put another way, while the trend is clearly bullish, I'm not expecting traders to enter Wednesday's session with an aggressively bullish bias. I'm expecting a more measured session in which dips are bought, but upside extension is generally muted.

Day timeframe Es traders should consider entering the session with a focus on 1963.25 and 1970.50. My baseline expectation is for a rotational auction, with responsive buyers stepping near 1963.25, and responsive sellers reacting to price near, and a bit above, 1970.50. Those plotting out a more bearish course should temper their enthusiasm until demand has collapsed between 1955.50 and 1956.75. Because only a complete give-back of Tuesday's gains would force buyers to reconsider their (short-term) upside bias.


E-mini S&P 500 (Es)
Source: eSignal


Any trading or volume profile related questions can be posted in the comments section below, emailed to me at or posted to my twitter feed @ByrneRWS



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