Don’t miss the next big move, let these charts guide you
Stock index markets have gone from
no-range days to incredible, phenomenal volatility without a pause in between.
We have not seen this type of straight-down smash movement in the markets since
early 2005… which are almost mirror images of this week.
ES (+$50 per index point)
S&Ps sold off thru March and then culminated
with a 51 index-point candle from stem to stern in April. This week’s current
range is 55 index points, providing yesterday lows are not taken out today. The
initial drop in April climaxed on this candle, and previous annual lows near
1150 rose +100 index points hence.
ER (+$100 per index point)
Russell 2000 has ranged across $4,400 per emini
contract from Monday’s high to Thursday’s low… exact same span of early
January. What followed then was a lower-high rally that failed near the general
62% area and dropped to lower lows by late spring. Where are we now in this
cycle? Are indexes near relative lows and due for a bounce, or was this just the
start of something much more lasting and profound?
Summation
A number of skilled traders I work with have reported booking some
unbelievable intraday gains this week. One look at the short-term charts says it
all… intraday swings and ranges the likes of which we seldom see since early
2003. While it’s not reasonable to expect similar wild ranges every session, I
do believe there will be much more of this intraday action well into next year
or beyond. The days of a 5pt S&P or ER range will happen, but we should prepare
ourselves for normal to large-range session swings with much more frequency than
of late.
Stock markets cannot remain dormant forever,
and it looks like the sleeping giant has been aroused in his bed. Much more on
all of that in the weekend update… and I’ll see you then!
Trade To Win
Austin P
(free pivot point calculator, much more inside)
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.