Emini traders keep short bias, for now
Another simple day of trading last
Friday ended the week on a very positive note. Shorting into each lift per the
morning session, step away from the screens for a few hours of enjoyment midday
and short the afternoon drop past 2:00pm was our recipe for success. With a new
week poised to begin anew, what may we expect to navigate thru next?
ES
emini
(+$50 per index point)
S&P 500 futures futures gapped down off the
open, filled the little gap and gave sell signals soon afterwards. Additional
sell signals midday from above S1 value and later on near 1300 each worked for
at least +4pts or better. Three short trade signals all worked well beyond +4pts
apiece offering potential for a very profitable day.
ER
emini
(+$100 per index point)
Similar story for the Russell, but it traded
quite a bit flatter than the S&P did. Once the lucrative drop off the open thru
a couple of swings was booked, they traded rather tightly until the final hour
descent.
ES
emini
(+$50 per index point)
Big-picture on the daily chart shows price
action back near relative lows of the current sideways range. We also see where
the market went from highs to lows thru this stale swing in two days’ time. Some
buying interest is probable down here, but weakness remains the bias until
proven otherwise on our trade-bias filter charts.
ER
emini
(+$100 per index point)
Those small caps also made a big move lower.
Once the hapless bulls who gamed their emotional guesswork into the Fed meeting
were met with reality, they thundered their way to the exits in typical herd
fashion. Savvy emini traders were all over that long-awaited directional move,
ignoring all but the sell signals issued time and time again over the last two
normal price action sessions.
Further selling should test 720 and possibly
700 or below unless buyers step back in with accelerated volume and strong
upside conviction. Barring that, indexes have a lot more downside potential to
come.
Summation
The first eight sessions in May were rather doggish to trade, while the latest
two easily made up for all of that and then some. It’s been a very fine month
overall to date, with lots of profit opportunity to come. Well-watched econ data
reports are out this Wednesday & Thursday, with emphasis on the Beige Book
report to wrap the drivel parade of stats. Bernanke and various Fed governors
have speaking engagements to end the week as well, and any one of them could
mutter something that rocks the market sharply in short-term reaction.
Plenty of catalysts exist for this to be a
stellar trading period, with now until next Friday’s start of Memorial holiday
weekend a prime time to play in our profession. Stay alert mornings &
afternoons, tip-toe (or stay away) thru the midday lulls and we’ll end the month
in our usual fashion of methodical success again.
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.