The props were removed last week
All that work to
properly dress those October windows was erased when November rolled in.
The big funds did what they always, always do: press the end-month, quarter and
fiscal year upside regardless of all else. Once those artificial props no longer
need support, commercial buyers evaporate inside the air pockets on a chart.
S&P 500 gapped up at the open and welcomed a
fresh wave of buyers awaiting the customary dip to pivot point (navy blue line)
support. Once they bought the dip, sellers stepped in and slammed them on their
heads. It was a bit gyrational there until midday, then buyers evaporated having
no more artificial reasons to be long.
Russell 2000 futures sold hard in the morning,
then were sold into slavery all afternoon. Clearly the small caps were propped
up hard by the money that matters, only to be dumped unceremoniously once the
monthly – yearly statements were printed one day before.
S&P 500 futures are back to where they began, 13
sessions ago. The past 2.5 weeks of trading “action” have been erased,
posthaste. Initial support near 1367 should hold, or 1350 at the 50dma will be
tested in a hurry.
Same story in the Russell 2000 futures. Back
towards initial support, and a bit below. Two weeks of upward grind, gone in one
fell swoop. 746+ magnet at the 50dma is next.
Summation
Just a few days away from mid-term elections,
then on to year-end objectives for the market. Today’s early reaction to the
econ reports’ drivel at 8:30am has been selling the futures. A big plunge early
could set the stage for recovery into the afternoon, while early buying attempts
and/or a flat market midday that cannot lift itself off the mat may sell off
with gusto again this afternoon.
Either way, should be some active trading for
intraday traders to finish the week. No complaints about what we’ve seen in the
index futures action all year, with 2007 shaping up to be even better from
there!
Trade To Win
Austin P
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.