Read Larry Connors' blog – Short Term Trading Strategies
A dull start to the new month all morning turned a bit exciting in the afternoon. Can we expect to see increased range & volatility soon?
S&P 500 traded another narrow range in unstructured fashion. Price action held within a 2pt total range for the first two hours of trading... an amazingly dead period of (non)performance.
After that, a blip upwards above the daily pivot point was the only attempt by buyers to keep the upward incline intact. A bit of selling hit that drove prices down -8pts inside of one hour. After that, continued consolidation & chop.
Russell 2000 futures (and NQ futures) were a bit more orderly than ES. An early lift off S1 value became a two-hour tight range coil, which broke downward in tradable fashion. Two swings lower, one good for at least +4pts (or more) and the other good for at least +3pts (or more). After that, sideways dribbles into the closing bell.
S&P 500 futures have formed a very clear retracement grid on the daily chart. Any pull back to 1332 or even 1320 on the low end should hold if higher ground is in their future. A break below all these values and 50dma near 1317 spells a reversal of fortune from there. Bullish for now, until proven otherwise in the chart. Believe what you see, as the old adage goes.
Russell 2000 futures are trading much more loose and unstructured. The daily chart view here is rife with sideways surge candles of indecision. 720+ must hold for strong upside continuation to be probable, with 50dma holding Monday's close to the exact tick. Today and the balance of this week should be telling as to how small caps and tech proceed from here.
Summation
Late-day sell programs have kicked in the past two sessions. We'll see if this
replaces the former pattern of last-hour buying into the end of September. ES
has traded inside an incredibly small series of intraday ranges... look for that
to abate real soon. The next 20+ index point session range lies not far ahead.
If they break 'em directionally, don't fight the trend!
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.
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