Why you shouldn’t follow the herd
I was supposed to be on vacation last
weekend from Thursday forward. Those plans got pushed forward one week due to
myriad circumstances, and am I ever grateful! Friday, Monday and today have been
three of the easiest, most profitable consecutive trading sessions in 2006 to
date.
ES (+$50 per index point)
S&P 500 futures opened above the daily pivot
point as bulls tried to prop ’em up, but that was not to be. Selling begat
selling once again as we enjoyed nothing but pure sell signals all day. Right
off the opening bell there was a buy signal, but that soon reversed to the short
side as we sold, sold, sold and rode the freight train south. Very easy trading
day… just keep shorting each lift & fail, simple as that.
ER
(+$100 per index point)
Russell 2000 futures also flipped from opening
long to short signal and never looked north from there. Anyone who tried buying
the straight plunge lower offered us liquidity on our side of the trades. After
all… those methodical profits must come from somewhere. These are the times
that savvy emini traders live for!
ES (+$50 per index point)
S&P futures broke below 62% support of the most
recent low-high swing retracement. In the process they also closed well below
the 50-day moving average (olive line) magnet as well. Looks like that
weeks’-long boxed coil is breaking out directionally, and the favored direction
is currently down. Expect 1280 and possibly 1265 to be the next stopping points
of quasi-support below current resting levels from here.
ER
(+$100 per index point)
Small caps held relatively stronger than the
S&Ps… 50dma was the session low, and 62% of most recent upward swing remains
intact. Until 741 breaks on a closing basis, bulls have upside hope. A daily
close below that mark brings in 730 and then 718ish as next price magnets in
sight.
Summation
There is no valid reason in the world why any skilled, knowledgeable emini
trader did not make money hand over fist in the most recent three-session
stretch. We know from a statistical standpoint that a majority lost money… a
majority always does. That said, we do not have to be part of the “market-fade”
herd. The “emini herd” collectively tries to buy plunging markets at various
points of (guesswork) support. That herd mentality of mindset to fight the
market is what creates beautiful sessions like today. Long live the herd… may
they collectively line our pockets forever.
From Wednesday morning forward I am officially
on vacation. Our next visit together in here will be Monday morning 4/17 on
national tax return day. Please enjoy your Easter holiday weekend, and best
trading wishes for the balance of this week!
Trade To Win
Austin P
(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.