Bring on the year-end rally
Wednesday’s session was one of
divergence following the 13th consecutive rate hike while preceding a slew of
econ reports and option expiry for the final two sessions this week.
ES (+$50 per index point)
S&P 500 gave an early buy signal off its pivot
with confirmed bullish bias and then offered a viable sell signal near 1182
which was prior resistance the day before. Both of those trades worked with
ease, albeit for modest gains in a muted session.
After that, buy programs at 1:00pm EST fired
the index to new recent highs where it promptly pulled back and coiled tightly
into the closing bell.
ER (+$100 per index point)
Russell 2000 was a mix of the S&P 500 and
Nasdaq 100: up and down all day. Price swings were random, somewhat dramatic and
purely program driven. Some explanation for that could be Dec index option
expiry today and equity option expiry tomorrow. Small caps tend to get kicked
around during option expiry week much more than the big-caps for obvious
liquidity issues.
Other than that, it was a gyrational stalemate
from bell to bell.
This Session:
ES (+$50 per index point)
S&P appears ready to break out of this seventeen
session (3.4 trading weeks) coil between 1260 and 1282. That’s quite a long time
to be pinned sideways in what is being trumpeted as a year-end rally in
progress, would you agree? Hopefully something breaks directional real soon… I
for one am tired of chicken-picking +2pt & +4pt ES trades out of micro-range
intraday swings.
ER (+$100 per index point)
Russell 2000 posted another sideways doji
session of indecision. Small caps and techs had another dismal day while big
caps found limited money flow.
Summation
If the year-end = January effect rally is due to begin, God speed its
arrival. Nothing but sideways and/or small range grind for nigh on four full
trading session weeks. That is tiresome. Bring on the volatility, volume or at
least sprinkle in a few normal range sessions now & then… let the buying begin
if such is destined to be. Should small caps and techs continue to flail, it
might be more of a January like 2005 instead of what the bulls fully expect
right now.
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.