These levels are key for today’s action
Last week’s pre-holiday sessions were
sideways, drifty and mostly micro-range (non) events. We might expect more of the
same to begin this week, but the last session or two could easily offer
significant fireworks as 2005 ushers out.
ES (+$50 per index point)
S&P 500 bumped sideways thru a mostly 2pt range
from 1275 – 1277 all day. Brief blips higher and lower didn’t change the fact
that this session was practically comatose.
ER (+$100 per index point)
Russell 2000 coiled tightly inside a 2pt range
as well. Basically, the lights were on but all professional traders stayed home.
This Session:
ES (+$50 per index point)
S&P has rolled sideways from 1260 to 1280, a
meager 20pt range for the past six weeks and counting. Count on that to break
out or down (most likely) big-time, and soon. 1245ish is the next strong magnet
visible on the daily chart right now.
ER (+$100 per index point)
Russell 2000 has been somewhat more dynamic
than the S&P, but still essentially sideways into the final four days this year.
670 held as dual support on its only test last week, as one would naturally
expect. A double-top high near 697 will find sell stops resting there to test
upside conviction if they press it higher soon.
Summation
Brett Steenbarger documented in his most recent piece
here that S&P 500 is trading within its tightest range of any four-week
period since February 1996. Ten years of data, smallest total range over four
weeks in that entire decade. What more is there to say? Small range markets lead
to large range markets… an inevitable evolution probable to turn next week. It
is possible we’ll see the beginnings of a range break this week, with Friday
afternoon a possible zone of significant buying or selling.
Four more trading days to go… and significant
profit potential develops beyond there!
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.