Prepare for more wild action today, here’s why
Yesterday’s session continued an almost
unbroken streak of wild, wild, wild volatility. For example, the Russell 2000
opened near a high above 623, dropped to 617.50, chopped its way back above 623,
sold off down to 616, rallied to 623, dropped back to 617 and rallied another
+10pts from that low to 627 in the final hours of trading. And, all of this was
done thru the Yom Kippur holiday.
Net-net the indexes closed more or less
unchanged for the day. Between the bells they swung thru what have commonly been
normal session ranges five – six times in a single session.
We have some skilled, aggressive traders in our
room reportedly knocking down a normal week’s worth of profits in one session
like yesterday’s. That takes skill and nimbleness along with numerous trades
going both directions with a bias toward neither. We’ll expound on that topic
much more in the weekend article ahead.
Meanwhile, any attempts to plot pending price action on a chart for
today is little more than wasted time. Indexes have gone to the opposite scale
of volatility from where they were this time two weeks ago. Now is a time for
skilled traders to be passively aggressive on the entry signals with absolutely
zero bias or expectation of direction. Price action tends to bounce near daily
lows and stall near session highs, with big moves off the open and late
afternoon each way.
I expect this wild action to continue until we
see evidence otherwise. The past two Fridays have been quite dull and choppy…
today has the feeling it will be anything but that!
Trade To Win
(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.