Here’s why I expect fireworks in today’s session

Previous Session:

Yesterday’s action in the stock indexes
was usual sideways program-slam behavior we’ve seen so much of lately. The
Russell sold off first and most, while ES held higher on the drop and subsequent
pop. There really isn’t any type of accumulation or distribution of stocks
taking place… just random buy-sell program activity from short term players.

We had a profitable day, no complaints. The
only challenge was trying to play both symbols when ER was on confirmed sell
signals near 661 while ES remained on confirmed buy signals above 1224. I did
not short the ER while holding ES long, and in retrospect that would have turned
out very profitable soon after. My early ES long stopped at par = swapped to net
short, ER dove +5pts from short signal (without me aboard) and then everything
squeezed higher (as expected) to end the day.

We caught some of the downside in ES, much of
the upside squeeze in both, booked modest profits and ended the day early.
Sideways surges like yesterday are fine fare for scalpers, and we ended up with
scalper’s gains while swing trading in search of directional moves.

This Session:

ES (+$50 per index point)

S&P 500 remains in a roll between 1217+ and
1238+ at this time. What’s that… 13 points? Not even a normal day’s range when
VIX levels aren’t laying flat on the ground. These days 13pts ES looks like a
monumental span, when in reality it’s just a normal market’s leg up or down.

The index is definitely coiling up for a big
directional push, up or down is unknown but all signs point towards downward. We
could see 1200 in a heartbeat, even within a single session if selling has an
excuse to beget more of the same. Upside has layers and layers of resistance to
fight thru… a much more difficult journey upward, but of course not

ER (+$100 per index point)

Russell 2000 futures see 655 and 664 as similar
lines of demarcation that ES has. When the bough breaks, this market will
fall… or rally. The 645 and 675 levels are within one day’s striking distance
one or other is likely to be hit when the sideways range exhausts itself.


Today’s session is the most likely one where big funds try to pin
indexes higher. Tomorrow is final day of the month & quarter, a session where
said players attempt holding the lofty levels that previous session attained. If
we see this pattern play out, look for midday to afternoon ramp which could
exceed insignificant chart measures such as R1 – R2 – R3 values, etc.

Nothing is certain in our profession, but an
upside bias certainly exists until next Monday’s opening bell rings.

Trade To Win

Austin P

(free pivot point calculator, much more inside)

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.