The next 2 days matter, here’s why
As predicted, Wednesday’s session
erupted in a directional move of some distance covered on the charts. It was not
an easy day to trade: buyers had to chase the tape early on as price action ran
away, with a lack of normal intraday pull backs to support offering clear second
and third long trade signals. Clearly the shorts squeezed early as buyers drove
them off their stops… leading to some pivotal setups in the charts ahead for
today.
ES (+$50 per index point)
S&P 500 opened “in the hole” on a gap-down
print and rose straight up from there. After breaking recent resistance near
1211 ~ 1213 zone, price action rolled sideways in rather spiky fashion from 1213
~ 1217 zone. A close at session highs completed the 16pt total range day.
Traders had to be aggressive on the long side early, as profit opportunity dried
up save small scalps past noon EST.
ER (+$100 per index point)
Russell 2000 also rocketed out of the hole and
staged two very shallow pull backs before trending upward in the afternoon. The
ER was much more methodical than ES past noon, offering 2+pt long trade scalps a
few times into the close.
Basically, it was a squeeze & grind session
yesterday. Past the FOMC sideways confusion, buyers stepped in and shorts
checked out. Simple as that. Whether it was due to falling oil prices or any
other host of things, we absolutely knew better than to keep pressing shorts
into an uptrend day like this. Once key resistance levels were broken early, it
was buy or stand aside all day.
This Session:
ES (+$50 per index point)
S&Ps are now within a couple points of a key
action point in the weekly chart. 62% retrace of the recent two-month selloff
are about to be tested soon… probably today. This is a major line in the sand
for bears and bulls. A weekly close above ES 1220 opens the sky for year-end
rally to match or exceed year 2005 current highs. Failure here could stall or
outright kill the rally from further gain before considerable decline.
ER (+$100 per index point)
Same story in the small caps: less than two
index points from breakout confirmed on the weekly trend chart. We’ll know by
Friday’s closing bell whether upside is confirmed and it’s time to buy with both
hands heading into holiday seasonal strength.
Summation
Should see some upside follow thru today, pre-market futures poised to
resume the rally right from opening bell’s ring. Let’s face it… recent market
action has had more false wiggles & jiggles than a modern country-western music
video. We might be seeing true upside continuation to come, today and tomorrow
could be pivotal to confirm.Â
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.