The trend is up, so look to buy pullbacks
Thursday’s session was a classic gap &
go upward ascent. These type of days are my least favorite to trade, on a
personal level. One thing I never do (any more) is fight the trend. Sessions
like this are actually fueled by “divergence” players shorting setups that blow
up time after time. Many traders keep selling Bollinger Band resistance,
R1-R2-R3 levels while others search for next higher levels of resistance to
short repeatedly.
All the while, price action just keeps pushing
higher. Short and cover for loss, short and cover for loss, short and cover for
loss is what the hapless trend fighters do. That very action gives gap & go
sessions a life of their own, with Thursday yet another example of this human
behavior in the markets at work!
ES (+$50 per index point)
S&P 500 gave buy signals near 1260 and 1261+
early on, then pressed modestly higher from opening bell levels to the close. A
10pt total range between the bells… pedestrian move that ended at 1:00pm est.
Today we should see 1261 hold early tests of
support if upside has any further potential into the close. That is 38% of the
swing low on Wednesday to Thursday highs… a mark that attracts clustered buy
stops from shorts already open and longs who missed the first wave now waiting
to get in on the upside action.
ER (+$100 per index point)
Russell 2000 has the 686 level at 38% as
initial intraday support. Same general story as ES above… looking higher until
proven otherwise.
This Session:
ES (+$50 per index point)
S&Ps halted yesterday’s rise right at Tuesday
highs. If that mark is taken out, look for channel resistance near 1275 or
higher to be hit by today’s closing bell. 1259 ~ 1260 has been congestion for
half of the past eight daily candles. That one should hold any retest of support
today.
ER (+$100 per index point)
For the first time in quite awhile, Russell
2000 actually led the upside charge. Nearing obvious trendline resistance that
countless 1,000s of traders all see, a resolution upwards or right back down to
support should be witnesses today.
Summation
The trend remains up. For how long and how far that will prevail is
unknown to anyone on earth. Trade the trend until proven otherwise… that’s
where easiest money is always made. More on that topic in the weekend post, and
I’ll see you then. Good trading to you as always!
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.