Keep watching this setup in the S&P 500
Tuesday’s session was another low
volume, no range affair. The ES traversed six index points from high to low, the
ER just under five points’ total span. Six of the past session sessions have
been sideways = choppy inside cash market trading hours. Is this what we can
expect going forward into the end of time? Or will markets eventually return to
normal ranges and volatility?
ES (+$50 per index point)
S&P 500 has been staggering upward inside
ascending channel patterns. Price action also forms a measurable wedge with
clear contact points at two daily highs and also lows. This should be (emphasis
on should) a bullish continuation pattern where buyers pause before
pressing the tape ever higher. Many times this year such patterns of prediction
have blown up or down opposite of what was expected. Will this occurrence be
different? Only time will tell. Watch the blue lines for confirmed break next,
probable to cover considerable chart distance in rapid fashion when that
happens.
ER (+$100 per index point)
Russell 2000 likewise trades inside a forming
wedge pattern. As with the ES above, both are heading toward the apex of these
triangles with decision time coming soon. Should break upside via continuation
fashion, confirmed above the blue line and then above black line of resistance
from there.
Summation
Since October 31st with the exception of November 2nd, every single
session has been sideways and/or choppy from the opening bell to close. Most all
price increases since then happened on overnight gaps that held. Wednesday 11/02
session (large green candles charted above) was the lone directional session
where markets actually went anywhere at all intraday.
Yesterday’s micro-range sessions on low volume
and high chop clearly portend directional breaks coming soon. When we see price
action breaking out or down in directional fashion confirmed, following that
trend should be good for repeated & extended profit potential. This sideways
dance cannot last forever… the music will soon change to a much faster tempo
and beat.
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.