Emini Futures Outlook
Emini Futures Outlook
Happy New Year!
Globex futures took their first
opportunity to levitate thru Monday night. Common perception is for 2007 to pick
up where 2006 left off… rallying straight up with nary a pause. That may very
well happen, no one on earth knows what financial markets will do before it
happens. We can look back at history to see what may repeat itself in the
Chart 1: ES (+$50 per index point)
Chart 2: ER (+$100 per index
Jan 3rd 2006, all indexes were expected to pull
back or correct sharply. A modest dip in the morning of first session one year
ago soon erupted in a massive rally. Fade traders who insisted on shorting into
each pause of the lift got their heads handed to them… while creating
most-welcomed liquidity to those of use who trade in harmony with market flow
Two things to note here: price action began in
the direction expected, but staged massive reversals to print large-range
Chart 3: ES (+$50 per index point)\
Chart 4: ER (+$100 per index
Jan 3rd, 2005 was similar in a sense. Price
action sold off hard from the open, posting rather large-range moves relative to
what had been recently seen in December 2004. Once again, traders trying to fade
the big move while buying levels of perceived “support” got crushed. Those who
play the double-down game trying to catch tops or bottoms in days such as these
get turned under like dried cornstalks beneath a twelve bottom plow. Wrong way
to trade, for sure.
Along with a shortened week and first trading of 2007, we have numerous
market-moving econ reports that should keep things roiled all the way. Today’s
FOMC minutes at 2:00pm est have potential to shake tapes into the closing bell.
Ditto for reports Thursday & Friday, especially that non-farm payroll voodoo on
If recent history repeats itself, we should
enjoy a large directional push today. That may be in one direction all session,
or could reverse sharply without warning akin to last year. I’m a buyer or
seller off the open in aggressive fashion, will try to hold trades for big gains
if possible. Whether they take ’em up or down in the end, it should be a swingin’
good time either way.
We’ll know much more about potential trend
development this weekend.Â The next three sessions are widely watched for market
direction forecast. “As goes January, so goes the year. As goes the first week,
so goes January”. Get ready to hear that old adage in financial news media more
times than one cares to listen!
Trade To Win
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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.