My strategy is simple–buy the dips
Friday’s option expiry session was a
rather sideways intraday event for the emini markets. That said, it also saw
actual closing highs for many indexes at multi-year heights. In addition to
that, just about every major stock index and sector is either breaking out or
right at key resistance levels on the long-term charts.
We covered all of that with detail using
monthly charts inside the free public access “Weekend Outlook” section. Also,
foreign currency markets are in the midst of making what appear to be big trend
moves against a strengthening U.S. dollar. If this current strength in the USD
along with stock markets continues, the year-end push for equities could be
substantial. It may also reach annual heights by early December and merely chop
sideways near those highs into the final two weeks of this year.
We don’t have much to work with off the charts from Friday heading
into the open today. October option contract expiry may create some market waves
early on as stocks assigned to option traders via covered calls, naked puts and
calls held into expiration are bought = sold to close out all ends of those
positions. From there we should see a resumption of the current trend, which is
clearly in window-dress rally mode.
The overall outlook from here until proven
otherwise is higher for stock index markets. For sure, some days will offer
solid profits to the short side. That said, buying the dips when long signals
confirm should be given a little extra room to work for profit potential… path
of least resistance is upward until the charts tell us differently.
Trade To Win
(Weekend Outlook trend-view section…
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.