[Analysis] ES analysis for March 25, 2009

Let's consider the facts:

• ES has broken 800 level and close above.
• First retracement has happened.

Everything is pointing to a continuation of uptrend. So the natural tendency is to go long. The unknown factor here is the overnight reaction in Asia and Europe. So let's assume there is some noise introduced during the overnight session.

Let's consider our assumptions:

• Uptrend.
  
• Second retracement point at 790.
• Uptrend broken if ES breaks and stay below 790.
• Conservative target 815
• Aggressive target 830
  

The key is to translate the fact and assumption into a trading plan.

Ideally, I should take advantage of the overnight noise to gain a good entry price for the long. It is unlikely that the second retracement point can be reached in the overnight session. So if I want to go long, a good price would be below 800 so in case of stopping out, the loss will be minimal.

Here is the trading plan:

1. Overnight long order at 795.
2. If order filled before market open, look for chance to double position if 800 can be broken again.
3. If not filled before market open, look for chance to long on intraday retracement.
4. If holding 2 contracts, use 815 to exit 1 contract.
5. If holding 1 contract, decide whether to ride the full trend.
6. If holding 2 contracts and break below 795, consider cutting 1 contract.
7. If holding 1 contracts and break below 790, consider stop loss.