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Emini Podcast / The Daily Futures - Dynamic Support And Resistance

|Includes: DIA, GLD, PowerShares QQQ Trust ETF (QQQ), SLV, SPY

The Emini S&P500 Futures traded inside a 15 point range today giving traders opportunity both on the long and short side of market. The Euro was down significantly today on poor employment news. Standard & Poor's/Case-Shiller home price index dealt hopes of recovery here at home a cruel and unusual blow. I concur with my co-host David and look for a low tonight if it's not already in and then a potential rally into our own employment numbers Thursday and Friday. If we break below 1300 overnight on the Emini Futures, scratch the rally fantasy.


This will be our final post in the current series regarding Support and Resistance in the Emini Futures Market. If your goal is Learning to Trade, understanding how this works is critical to your success. As a CFRN Partner it is something we will continue to cover on a daily basis in the Live Emini Trading Room.

Last night our focus was on Fixed Support and Resistance in the S&P500 Emini. In this post we will cover Dynamic Support and Resistance. I will also be using a different market as I believe it is important to understand that these principles apply across all markets and all time frames.

The first chart is the Globex open Sunday night on the Euro 6EH2 Futures Contract.

Euro 6EH2 Dynamic Resistance 01/29/12

Price opened @ 1.3218, dropped to 1.3176 and then attempted a rally. Once Dynamic Resistance presented itself @ 1.3190 price dropped 100 Pips ($1,250.00 per contract). Our next opportunity came after Wall Street opened Monday morning and is highlighted on the chart below:

Euro 6EH2 Dynamic Support 01/30/12

Our final example will show that following a double top which formed during the European open, the second top made a slightly lower high and we are once again handed Dynamic Resistance @ 1.3183 which sets in motion a steep and rather rapid decline of 140 Pips.

Euro 6EH2 Dynamic Resistance 01/31/12

For the past 12 hours price has not been able to trade back above Dynamic Resistance. When it does, and it will, the pattern will repeat and we will once again see Dynamic Support at work. There are times when the market flattens out requiring patience and discipline until the setup begins.

In closing, keep in mind that you will find this behaviour in all markets and time frames. It will take time, effort and and a fair amount of trial and error before you begin to see the moves not only as they happen, but as they prepare to happen.

True harmony is when you learn to blend the Dynamic and the Fixed. You will find that one plays off the other like moonbeams on a rising tide. Once you see it, once you hear it, once you experience it... it is yours forever.

Learning to trade is a journey, not a destination.

Enjoy the ride...

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Emini Podcast for Tuesday 01/31/12