Here’s the support I see for the Russell 2000
Tuesday’s session
offered nothing new from the Fed and likewise nothing new in the
markets. Early morning price wiggles turned to wide gyrational surges for the
last two hours of January’s final session. A final FOMC session for Greenspan,
which marks the end of an era there as well.
S&P 500 futures opened lower, coiled below their
S2 value, popped into S1, broke well below S2 again, popped up thru S1 to fail
right at the pivot, then dropped straight thru S1, S2 and probably S3 (not
shown) as well.
20dma
30dma
50dma
ES (+$50 per index point)
For day traders trying to play the levels
yesterday, it was an extreme challenge at best. There are better ways to trade,
that is for sure. Regardless, the pre-Fed coiling and post-news gyrations
offered magnificent profit opportunities for nimble traders, tough sledding for
everyone else.
ER
(+$100 per index point)
Russell 2000 futures dropped from the open,
bounced off S2, blew thru S1 and the pivot point upside, failed at R1, bounced
from S1 again, blew thru the pivot, chopped thru R1, dropped to and thru the
pivot, then came to rest near S2 once more.
Traders playing the S/R value fades may have
caught some of those trades right, while catching at least an equal number of
them wrong while going the other way. A very gyrational day in small caps, to
say the least!
ES (+$50 per index point)
Daily chart picture remains same as the last time
we peeked at it. The past three-day candle pattern is a bearish evening star
formation, for those who lend credit to such things. 1273 and then 1270 are the
next two magnets of support below.
ER
(+$100 per index point)
Russell 2000 keeps on chugging upward despite
laggard drag from the big caps. Past two sessions have worked off a tad of the
extreme overbought nature in this index… should be interesting to see where
the rest of this week winds up (or down). We see various levels of support from
725 to 712+ down below.
Summation
In all honesty, traders trying to guess "which way next" on a trend basis for
stock index markets are still twisting in the breeze. Sooner or later the
uptrend will resume or downtrend will emerge. Recent increase in sideways
volatility at relative highs usually precedes a downside break. In any event,
we’re content to play the short-term charts with controlled aggression and let
the future sort itself out from there.
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.