Here’s my emini outlook for today
Last week’s options
expiration event went according to standard procedure. Random ups &
downs intraday brought on by large blocks of options contract gyrations. This
morning settles out assigned stocks and exercised options as old positions get
reapplied in the markets asap. Once that happens, stock market action has
earnings season, end-month sessions Thu – Fri and geo-political happenings to
deal with accordingly.
S&P 500 futures topped out at their R1 value,
coiled sideways and broke sharply lower into the afternoon. It was a rather
typical option-expiry Friday, with the added kicker of a directional swing that
spanned roughly 10pts. Very normal range session, good to see a reprieve or end
to those grossly abnormal. tight-range sessions so prevalent last year.
Russell 2000 futures also failed on the gap up
move to R1 value, offering a profitable swing move down to its daily pivot
point. A tight coil pattern for the next three hours broke sharply lower for the
most profitable move of that day. Again, just a normal market action in every
sense.
S&Ps traded an inside day from Thursday’s
indecision candle. Right back inside the upper range of sideways coil from
mid-March thru now. Eventually the range will break decidedly, but for now it
remains a sideways pattern intact.
Past three sessions in the ER have mirrored highs
& lows each time. We should see a break of this range real soon… quite
probably today. Look for a high or low close considerably away from the last
three daily candles on this chart as the next short-term directional bias.
Fruitful Periods
I’ve heard a number of emini traders mention that price action goes sideways
much more often than directional. In other words, the majority of time price
action is coiling or chopping instead of swinging or trending. Therefore,
doesn’t it make sense for traders to target the majority of time in a market?
I’ll answer that with this
analogy. Our growing season for vegetables here in my part of the country is
roughly four months long… from mid-May thru mid-September. That leaves the
remaining eight months, two-thirds of the year as impossible to grow fresh
vegetables.
Let’s see now… 1/3 the year
we can grow vegetables with ease, 2/3 the year we must do something else. Should
we gardeners focus on gathering food during the non-growing season? After all,
the majority of time each year is impossible to produce our own food. Should we
therefore gather dried roots and strip dead bark off trees thru the eight-month
period of time when cold & frost prevail?
Well, not me. In 1/3 of the
calendar year, I can grow enough vegetables on my little plot of land to feed
dozens of people. By the end of growing season, family & friends stop answering
their doors when I come to visit, for fear there are more summer squash or
cucumbers with me in tow. In that minority 1/3 period of time for the year, I
alone can harvest several year’s worth of profits… I mean produce. Sorry to
mix the metaphors there (huge grin).
See where I’m going with this?
If the ES and others only swing or trend 1/3 to 1/4 the total open hours in any
given week, what does that have to do with anything? If that minority amount of
time is where our greatest edge for production lies, who cares how brief it is?
We can readily make more money with greater ease during that fraction of
favorable time than the best frenetic scalpers can when tight-range buzz & fuzz
prevail. That is not my opinion… it is a mathematical fact.
No system, method or approach
can profit thru all market conditions. You must pick the specific conditions
that you wish to prosper within, and go from there. As a trader, I make most of
my money in a relatively brief amount of actual market time. What do I do with
myself when price action coils sideways? Heck, that’s the easy part… I sit
back, watch, wait and/or enjoy my life doing something else! After all, isn’t
time freedom and enjoyment of your life the very reason you wish to trade
successfully in the first place?
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.