Current price action seems very familiar…
Thursday’s session
trended lower, reluctantly. Each initial sell program was met with
reactionary buying of every dip. This action reminds me very much of this time
in March of 2000. Markets were printing all-time highs, media was bullish to the
max, most stock traders could only see upside to the moon, etc.
ES (+$50 per index point)
S&P 500 futures popped modestly off the open, then spent the duration chopping
their way down the chart. It was not a break & coil, break & coil type
movement… more of a choppy drop until buyers gave up in the final hour.
ER (+$100 per index point)
Russell 2000 futures popped harder off the open, failed right at R1 and made a
somewhat cleaner descent into the afternoon. Buyers staged a couple of feeble
lifts that were quickly sold into, and down she went to post low print at the
closing bell. Lots of tradable swings in this chart (along with ES above) all
day. At least +15pts potential per contract if trades were executed perfectly.
No one ever does that, but +5pts to +10pts per contract is still a nice day.
ES (+$50 per index point)
S&Ps failed right at key retracement levels for session high and closed below
its 50dma again. Not exactly a big picture of strength here at all. Likewise,
lots of congestion near 1265 before any pronounced break lower is confirmed.
ER (+$100 per index point)
Russell futures closed below their 50dma and trades back towards the mark in
pre-market session this morning. A kiss & drop from near 725 could turn into
quite the rout by the ending bell today.
Summation
Very tradable intraday action this week. Absolutely no complaints at all…
here’s hoping for more. In all reality, we all knew this type of volatility and
normal range action was coming. Those congestive sessions of sideways buzz and
range bound doldrums told us so. That type of action is fine for modest gains as
well, but normal market action as enjoyed this week is where the big cash is
made. My guess? We’ve only seen the beginning of volatility and range expansion
for year 2006. Bring it on!
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.