It’s rollover day, so stay focused
Wednesday’s session was one of more
normal price range and behavior than the past few micro-range sessions. Downward
direction from start to finish, with a few upward bumps along the way.
ES (+$50 per index point)
S&P 500 lifted into and sold off after 10:30am
oil inventory report. The midday coil topped out repeatedly at 1262+ resistance
before dropping to 1257 on sell programs and eventually 1253+ lows. As usual
lately, the clearest and biggest intraday trades came in the 1:00pm ~ 3:00pm est
slot… a much more productive timeframe than most choppy mornings have recently
been.
ER (+$100 per index point)
Russell 2000 signaled aggressive shorts near
686.50 and confirmed that signal near 685 before dropping below 681. The ER also
sell signals near 689 that worked to <685 off the bell, and a tougher leg to
catch following the oil inventory drivel as well.
This Session:
ES (+$50 per index point)
S&Ps hit the mid-line channel support we’ve
been charting for a week or two now. Next natural stop below would be 1235,
which is more likely than not to be hit.
ER (+$100 per index point)
Same story for the ER: mid channel line is
initial support, 664 zone and especially 650 next pair of logical targets below.
Summation
With futures roll over from Dec 05 to Mar 06 in the pits today and an
8pt premium for the new front-month contract, we might see some early gyrations
as positions shift thru that current -$400 gap per contract values. Charts used
above for education are Dec 05 price levels, and that contract will trade with
fine liquidity all day. Pure intraday traders will shift to the Mar 06 off the
bell, and we will use that symbol’s charts in here tomorrow forward.
Rollover day comes just four times per calendar
year, and this is one of them. Sometimes we see a few strange things happen in
the tape when price spread between contracts is wide as existing now. Much like
option expiration Fridays, there is more going on beneath the scenes than retail
traders can see. Trade the clear signals with confidence as always, but do not
be surprised if some early gyrations in the futures alone emerge from nowhere at
times today.
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.