Wednesday's session was
rife with wild volatility. Nimble traders who checked their bias at
the door and trusted the clear trade signals going both ways had ample
opportunity to make money. Lots of it.
ES (+$50 per index point)
S&P 500 futures opened on a gap down, popped
above the daily pivot, dropped to and thru S1 on the way to S2. From there it
experienced two short squeezes upward: back to the pivot point, the next to
nearly R2 value at session highs.
A 14pt total range was not large by any means...
but it was active. There were profitable swings going all directions for traders
nimble enough to catch them. Volatility is back, and likely to remain elevated
for quite some time to come.
ER
(+$100 per index point)
Russell 2000 futures lagged the bigger caps all
day. Sharp bounce from S2 pulled back into S1 and then fulfilled the pivot point
tap for this day. That's where price action pretty much stalled at from 2:30pm
into the closing bell.
ES (+$50 per index point)
S&P March futures contract closed back above the
50-day moving average via bullish engulfing candle fashion, said candle being a
"hammer" formation. Currently price action trades to 50% retrace of the most
recent hi-lo swing in pre-market action.
ER
(+$100 per index point)
Russell 2000 March futures contract also held
above its 50-day moving average in hammer candle style, with resistance now
overhead at the fib levels applied. A break & close back above 62% would kick
out buy stops and press this index back toward new highs. Failure anywhere below
heads back towards 700 or lower.
Summation
Today is futures rollover session. The June "M" contract is now front-month.
It's been my observation that the morning part of rollover sessions can be
erratic and hard to read... the transition from March to June is truly a
process, not an event. If they trade a little bumpy this morning, it's only a
4-times yearly occurrence.
As we spoke of in here a session or two ago,
general market volatility can be expected to ramp upward as price action
continues to tread downward. Boy, did it ever do so on Wednesday!
It's my belief that financial markets in general
and emini stock index futures in particular have changed their behavior on a
permanent basis. We used to see deliberate, methodical price action thru most
parts of a day, more days than not. For quite some time we've seen
program-driven surge moves immediately followed by listless consolidation and/or
gyrational chop. The speed of intraday price action has increased noticeably.
The evolution of online trading whereas big-money players and savvy off-floor
traders have greatly compressed the digestion of market driving actions.
The same moving averages, fib cluster levels,
oscillator readings, Advanced GET projections and floor pivot levels are read &
reacted to by more people with less lag time than ever before. Naturally, the
speed of our game has increased in the same fashion that action in the NBA, NFL,
NASCAR and other progressive sports have done over the course of time. Trying to
"stalk" or plan potential trade setups for short-term emini market action is
yesterday's approach. Outdated, and destined to fade away. Intraday traders
don't need deliberation or opinion: successful traders merely need a simple
instrument panel that reads like a roadmap to pending market action.
Why spend time, effort and brainpower trying to
guess where price action may stop or turn? How's that working for you? If you
are consistently profitable right now (not in the past) thru most current market
conditions, please don't change a thing. On the other hand, if you cannot seem
to push your trading results into the consistently profitable zone, I'd
respectfully suggest that price prediction is a failed approach.
Why not simply trade a method where clear signals
are issued and confirm regardless of where market action decides to head next?
Forget about trying to guess where price action is going at any point in the
future. Most sessions right now are all about slam-bam program trades going both
directions, with little deliberation in between. If you have the right method,
the right tools, the right approach and a neutral mindset, there is no need to
worry about anything else.
Turn off CNBC, tune into your chart signals and
hit the entries when presented. Let the losers stop out quickly, let the winner
run and rack up solid profits more days than not. Think less, preplan little,
react faster and profit more!
Trade To Win
Austin P
www.CoiledMarkets.com
(Online video clip
tutorials...
open access)
Austin Passamonte is a full-time
professional trader who specializes in E-mini stock index futures, equity
options and commodity markets.
Mr. Passamonte's trading approach uses proprietary chart patterns found on an
intraday basis. Austin trades privately in the Finger Lakes region of New York.
