I’m expecting buyers to step in, here’s why
Friday’s session was somewhat dull &
drifty. Tuesday brings in the last FOMC meeting for 2005. Monday is sandwiched
in between… setting up a defined pattern to watch for.
ES (+$50 per index point)
S&P 500 was a scalper’s session on Friday.
Short setup patterns (purple arrow) near 1266 worked down to 1263 before
chopping sideways midday. Subsequent buy signals at = past 1:00pm EST worked for
a few bits more.
The late-day slide took this one back towards
par for the course, no subsequent sell signals other than failed bounce to 1271
(not marked) that aggressive traders may have opted to play.
ER (+$100 per index point)
Russell 2000 gave a sell, a buy and a buy
signal on Friday. Chopped its way upward more than the ES, in usual greater
dynamic fashion. That is both good and bad: ER offers more profit potential per
trade than the ES does, but lately has been gyrating in spurts that takes out
stop orders and/or misses some deliberate entry signals by a tick or three. Too
many momentum players crowding into this one right now… similar to what the ES
experienced back in 2003 before it smoothed out once again.
This Session:
ES (+$50 per index point)
S&P has 1260 and especially 1245ish zones as
next layers of support. A sharp drop down to 1243+ is high-odds to be rallied
right from there.
ER (+$100 per index point)
Russell sees 682 and more likely 670s as next
stopping points for buyers. Any quick trip to 670+ is probable to be the bottom
this week, or exuberant bulls have some serious concerns going into year’s end
below there.
Summation
Pre-FOMC Monday session often drift upward, especially in the
afternoon as traders cover shorts = speculate on longs ahead of the Fed. Watch
for buyers to step in tomorrow, especially into the closing bell as a pattern
we’ve repeated in these umpteen straight interest rate hikes and counting.
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.