The market may be locked into this 3-day pattern
Previous Session
ES (+$50 per index point)
S&P 500 traded well inside a 5pt rolling range
yesterday once the first hour V-move was complete. Traders who caught one or
both sides of that news driven gyration saw the gist of action yesterday.
Remaining 5.5 hours of market inaction offered little more than sideways buzz &
fuzz.
ER (+$100 per index point)
Russell 2000 futures followed suit. One explosive
burst off the open, failure at layered resistance and sideways rolls in
micro-range fashion all day from there.
This Session
Last night was the beginning of Rosh Hashanah, which runs thru Wednesday
into nightfall. Last year we saw this three-day period stage one directional
move each morning and sideways coiling (for the most part) hence. Defined
patterns tend to repeat themselves, so we’re aware of what may be expected
ahead.
ES and ER have been pinned inside an impossibly
small range with brief blip outside for the past two sessions. Clearly there is
pressure building for a directional break soon. Whether that happens before
Thursday or afterward remains to be seen. I’ll trade the morning hours with
usual aggression and then see what has transpired from there. If price action is
trading OUTSIDE of the noted sideways range, it might offer prime opportunity
thru the day. If instead we see the same coiling range hold fast, I’ll stand
aside and let it pass.
Summation
The markets have been rather dull since September began, and
October’s arrival did nothing to break the doldrums. This year has delivered
more micro-range intraday sessions than I ever recall seeing before. It will be
a most welcome change when volatility and ranges expand to more normal levels
than recent decades’ lows. Now is a time to be patient: we must always be
willing to settle for what the markets offer. Scalp trade ranges exist inside
the coils marked above… swing trade opportunities lie outside in similar
fashion.
Trade To Win
Austin P
(free pivot point calculator, much more inside)