Here’s what to expect in the indices today
Monday’s session was one
of trend continuation from Friday. The Russell 2000 led upside to
greatest degree, followed by all other indexes into the afternoon. A customary
stop-run, program selling event kicked off as expected and held at clear support
lines discussed in our live room. From there they bounced back upward into the
close, with Dow Industrials back above 11,000 as we’ve heard about innumerable
times since then.
I actually had three different friends call me on
the phone to ask if I made $1,000s of dollars while trading yesterday…
according to the evening news, stock markets went wild. Public perception, I
suppose. The markets were indeed quite tradable, and should continue to improve
today.
ES (+$50 per index point)
S&P 500 futures rose in agony yesterday. Buy
signals near 1291 worked for up to +6 pts at the high, several hours later.
>From there it was a quick dip of -5pts off the peak before recovering into the
close. ES bounced from clear support right where we expected it would.
Overall it was another micro-range session that
didn’t crack 8 pts total from low to high. Gentle bleed upward, quick sell off
and quicker recovery in the afternoon, but very tight ranges for an index
knocking on the door of its 1,300 level again.
YM (+$20 per index point)
Dow futures were on buy signals off the open from
10990 and 11000 where they eventually rose to 11067 before the afternoon
stop-gun dip. That patterned event halted right at clear support just like the
ES above, and recovered somewhat into the bell.
NQ (+$20 per index point)
Nasdaq 100 futures were a bit bumpier than the
old economy indexes above. The 1745 level was morning buy signal, which worked
up to a pedestrian 1758 high if held all the way. Very comatose tape here on
Monday. Same general M.O. in the afternoon as above.
ER
(+$100 per index point)
Russell 2000 futures are where the money was on
Monday. It opened on a buy signal near session lows and stepped its way higher
all day. There were at least four, actually five pull back buy signals confirmed
in our 3min trade chart setups good for at least +2pts potential each.
That type of intraday dynamics was lacking in all
other e-mini symbols Monday, what anyone consider an unusually small range day.Â
Summation
Indexes have gone mostly straight up since the early lows last
Tuesday. Dow closing at 11,000+ is likely to spur a new wave of money entering
the flow. Upside bias has the nod until proven otherwise, but any sharp
corrections spurred by econ news or other catalyst could pull back considerably
on a sell program cascade.
None of that really matters to pure intraday
traders… merely following the trade charts is sufficient. The Russell 2000
continues to be a very tradable symbol, while the other symbols post more
micro-range sessions than not. With indexes nearing or in some cases trading at
all-time highs, this price range compression should not be the case. However,
here it is. Looks like the momentum traders who used to ply the NQ are now
trading crude oil, gold and Russell 2000 futures instead.
Actually, our intraday trade approach works
excellent right now in crude oil and gold futures. I’m personally restricting my
own e-mini trades to the Russell 2000 alone. All symbols are tradable, but the
intraday ranges are so minute more often than not for ES, NQ and YM that it
makes sense to me for only working the most dynamic of them.
Expecting a wider range session than yesterday in
the major indexes… pretty tough to print a smaller one. Should be profitable
either way, if we play our charts right!
Trade To Win
Austin P
(Weekend Outlook trend-view
section… open access)