Emini Futures Outlook

Emini Futures Outlook

Austin Passamonte

Great Morning!

After the Thanksgiving holiday weekend, there were no x-mas
shoppers to be found in the aisles on Wall Street.
It seemed more
like Boxing Day instead, where returns and refunds ruled the U.S. stock market

S&P 500 opened the pit session on a strong sell
signal near 1401, and then gave a secondary sell signal near 1397 when S2 value
was broken soon after. Either of those short signals worked stellar, as the
index finally painted a chart with greater range than 7pts wide between the

There were other sell signals further down the
scale, as one would expect in a directional day like this. At no time should any
ES trader have been a buyer, just short or flat all day.

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

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

Russell 2000 futures mirrored the ES, which
always means favorable trading conditions. When one symbol is heading upwards
while the other treads down, sideways congestion (as we’ve endured for a couple
of weeks now) is the result. When both symbols rise or fall in unison, it means
broad-based accumulation – distribution is underway.

ER gave sell signals at 790, 783.50 and 779+ all
before noon est. While no trading day is ever easy, this one was simple as it

Chart 3: ES (+$50 per index point)

S&P 500 futures have returned right back to where
they were fifteen sessions ago. In other words, the prior three weeks of dead
volume, micro-range session advance was completely erased in 6.5 market hours.
This is how the tired, extended rally has advanced all year. Lots of creeper
type up days negated by one slam move lower before the process repeats itself.

Note how the ES halted nearly to the tick on key
support of the most recent upswing. Clusters of buy stops and sell stops exist
near 1382, a congestive point since mid-October. This one needs to hold support
right here for continuation higher. A close below 1380 seeks out 1372 and then
1350 from there.

Chart 4: ER
(+$100 per index point)

Russell 2000 futures paused at the halfway mark
of November’s upward progress. 62% and the 50dma both await retests below to see
where buyers may take a stand. Similar chart to the S&P above, but comparatively


No one with any sense of normal market action was surprised by the one-day
pullback here. With Bernanke speaking midday and Greenspan in public later,
markets will hang on their every word for hints of rate decisions pending. This
morning is likely to follow yesterday’s trend, followed by reaction to
Bernanke’s utterance either way. A moderate slate of economic reports this week
gives traders plenty of fodder to jerk the tapes in volatile fashion.

End-month sessions have an upside bias, and
year-end props to the market should keep price action higher into the last
session of 2006, but factors unknown to the markets right now always have
potential to derail that ride. No change in the outlook for now… sideways to
higher market action is fundamentally probable unless otherwise thwarted by
factors unseen right now. The latest dip will bring in dipsters looking for the
next key long trade entries right here. How they fare with that this week may
set the tone for December.

Trade To Win

Austin P


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