FREE Guide: 6 Fibonacci Types that Create the Most Precise Price Levels, Targets, and Reversal Zones

May 30 Chart of the Day - S&P 500

While the New York Stock Exchange (NYSE) was closed Monday in observance of Memorial Day the global after-hours electronic trading system (GLOBEX) opened as normal Sunday evening at 6pm eastern time.  And given the US debt ceiling headline news over the long weekend the S&P 500 futures ticker /ES gapped up about 20 points on the open to keep the bulls firmly in control.

After some cooling off on Monday and a mild retracement ES is back charging to the upside early Tuesday morning in pre-NYSE market hours indicating an upside day may be in store when the equities market opens at 9:30am eastern for regular trading hours (RTH).

On the current ES weekly chart I've only marked it up with Support/Resistance and Trend.  Also known as basic structure.  In this view traders can see that price often ping pongs between historical levels before proceeding in its next direction.

I took this approach for the weekly for a couple of reasons.  First, because these are the simplest price action technical analysis tools to apply on any chart. And second, because earlier in my trading career as I was enrolled in a very intense and immersive price action training program my instructor and mentor requested that we only trade using support and resistance for 3 months!  

And let me tell you from first hand experience, if you can successfully and consistently trade with only support and resistance (which I did for those 3 months) then when other price action tools such as Fibonacci, Supply/Demand Zones, and Change Control Zones are layered in and used the charts and anticipated price levels and zones become extremely laser focused and precise!

So as you can see in the ES daily chart I marked it up in that fashion providing mathematically derived levels of interest in both directions!  I do not make predictions, I don't call tops or bottoms, but I do anticipate potential price paths.

To the upside, 4260 - 4280 provides a potential target area for the bulls where they could meet some technical resistance.  But as traders should know, price never moves in a straight line.  In fact, about the only thing guaranteed in the markets is that price will cycle.  It cycles up, and it cycles down... across all time frames and charts.

That is why as price action technical analysis traders we like to develop levels of interest in both directions.  You see, by definition, traders should not label themselves as bears or bulls and truly be able to trade in both directions.

Ultimately, what I learned long ago is that I don't need signals, indicators, or "secrets" to be a confident and consistent trader.  I simply need the 5 Price Action tools that are native to every charting platform out there.

Does it work 100% of the time?

Well guess what…
Neither does anything else in determining future price action but because of the underlying math and statistics behind it all I became a firm believer and user of these tools.

If you'd like to enroll in the same exact Introduction to Price Action Trading using Support/Resistance and Trend course that I did we're offering it at an incredibly low price this week revealed at this link.

S&P 500

S&P 500 price action technical analysis


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