Here’s one of my favorite trading patterns
Thursday’s session
ES (+$50 per index point)
S&P 500 posted another “doji” day of indecision
near recent highs, rallying sharply and then selling off with equal if not more
gusto to the downside. 1243 is the next obvious magnet on this chart, with 1230
probable as well.
ER (+$100 per index point)
Russell 2000 has 670 in its sights, probable to
trade 660s before we see the much-awaited year end rally kick off. Cannot rule
out further upside continuation right from here, but the sellers keep
overwhelming buyers on rising volume each time the tape turns lower.
This Session:
ES (+$50 per index point)
The S&P gave an opening bar sell signal neat
1267 that went toward 1263 early lows before firing upwards on buy programs. A
long signal confirmed by several measures near 1267 also offered another +6pts
potential profit from there. Lastly, the failure at highs into resistance bands
gave a third series of high-odds short signals near 1267 which worked down
toward 1260 in the end.
Whenever we see a sharp directional move
followed by a tight consolidation (square box) paused, the odds are high it will
break in continuation fashion. When such a pattern comes AFTER a recent failure
& reversal, the odds of continuation are extremely high. This was almost
a sure-thing trade yesterday, one to be loaded up into and ridden for solid
profits.
ER (+$100 per index point)
Same general M.O. for the ER. Short signals,
upside explosion, failure at resistance bands, high-odds short signals confirmed
just above boxed coil… load the boat and ride that sailing ship southward!
Summation
The recent turbulence near current highs suggest downside potential
to come. Anything is possible at any time, but we’ll be hitting the clear sell
signals with a bit more emphasis than buy signals going into the weekend with
weakness in those charts.
Trade To Win
Austin P
(Weekend Outlook trend-view section…
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.