If you need to see main trend, look at these 3 charts
October index and equity option
contracts expired last week, with dramatic flair. Wednesday’s afternoon ramp
followed by Thursday’s equal drop were directly attributable to option contract
buy-sell gyrations. It’ll be interesting to see where price action goes this
week devoid of artificial pressures like that.
ES (+$50 per index point)
S&P 500 swung between 1200 and 1175 levels 5.5
times since October 10th. Friday’s consolidation of the two previous extreme
sessions sets up the next significant move ahead. Which way to lean? Downward is
the trend, sell pressure should cluster near 1195 ~ 1200 and breakdown momentum
should pile on if 1175 is taken out as well.
ER (+$100 per index point)
Russell 2000 holds toward the higher end of its
W-shaped chart swings. Overall this is a bear-flag consolidation pattern
probable to break lower soon. 640ish is the zone of upper resistance while 617
lows is the closely watched zone of demarcation below.
YM
Pulling a weekly chart view from of the weekend
market trend view in our website, we see where Dow Industrials broke and closed
below this year-long wedge pattern dating back to late October 2004. Two weeks
ago was the break & close below this crisp trend line. Last week price action
spiked back inside the pattern, but closed back below in bearish confirmation
fashion.
Summation
SOX and S&Ps are showing similar bearish confirmation signals in the
weekly charts as well. In a nutshell, selling all rallies that hint of failure AND
playing the short signals aggressively makes perfect sense until that approach
fails to work somewhere down the road. The trend is down until proven otherwise,
and there is more evidence in the trend charts now than ever for such bias to be
valid.
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.