A close above this level means we’re going higher

Thursday’s session was a gap & flat
event for roughly half the day.
ER kept ebbing higher and flashed numerous by
signals that resulted in small swings upward. ES stumbled just about sideways
until late afternoon, when it begrudgingly march upward into the closing bell.

ES (+$50 per index point)

S&P 500 is trading right back to upper channel
resistance in jagged stair-step fashion. Yesterday’s 10pt upward ebb was a
day-long absence of sellers and late-day attraction of buyers.

ES (+$50 per index point)

Year 2005 has been a very sideways, 100pt total
rolling range in the S&Ps. One of the smallest annual ranges we’ve seen in
recent history, same as 2004. I would opine that 2006 may be much wider and
volatile than the past two years combined, but we’ll work with that when the
time comes.

If fund managers wish to press above current
calendar year highs to get the bonus checks flowing, they are roughly 10pts away
from making that happen. Price action did close two ticks below March highs
earlier this year, and failed there two more times in late summer before the
latest swoon. 1245 area could become a price magnet in the near term, should
become solid support if broken on a closing basis this week.


October index options ceased trading last night and settle in value
at the averaged open this morning. Equity and ishare October option contracts
cease trading = expire at the close of trading today. We could see some
gyrational spikes during the session, particularly in the final hour of trading.
Next week traditionally offers a bullish bias, and the upside party may have
begun in earnest yesterday. Time will surely tell, and we relish any directional
action that comes our way!

Trade To Win

Austin P


(Weekend Outlook trend-view section
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.