Emini Futures Outlook

Emini Futures Outlook

Austin Passamonte

Great Morning!

The FOMC non-event yesterday went according to
Nothing done, no changes, one voice of dissent. The Fed
may face some serious monetary policy issues in 2007 and beyond, but for now
they can ride the status quo.

Stock market action went according to
expectations, too. One move in the morning, quiet period ahead of the news
release, sideways gyrations that wedged into a triangle pattern from there. Same
thing we’ve seen for the past several FOMC events and counting. Until the Fed
begins raising rates next year, the actual news-event market reaction is not
likely to change much at all.

Chart 1: ES (+$50 per index point)

S&P 500 futures began the day near their pivot
point, sold off to the S2 value midday and then gyrated their way back to the
pivot magnet in closing. Modest range day, no trend, just a V-shaped swing day.
Profitable potential on short signals just below the pivot early, and then long
later on in the afternoon.

Chart 2: ER
(+$100 per index point)

Russell 2000 futures were relatively weaker by
comparison. Price action dropped well below the S2 value ahead of news,
including a blatant stop-gun surge lower at 2:13pm EST. Just like the S&P, sell
signals early and buy signals late in the day offered profits on both sides of
the market intraday.


The pattern for next session following FOMC events this year has been
directional and/or large range price movement. The day after past several FOMC
events has been much more tradable than the actual event. Today precedes two
expiry sessions ahead in this triple-witch week. Anything is possible in any
market at any time. That said, today holds high potential for a trend session,
possibly large range to boot.

Whatever direction price action takes, stay with
it. Possible to see some morning gyrations before a midday or afternoon surge.
Premarket futures are poised for a gap-up open, which will have me starting on
the long side unless/until it reverses. The overall trend remains decidedly up,
with merely two weeks left of trading before 2006 mutual = hedge fund bonuses
are in the books. "Normal" market action may be suspended from now until Jan 2nd
2007. Sell signals work to some degree when given, but the upside will prevail
until the persistent trend eventually changes.

Trade To Win

Austin P


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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.