These signs indicate the next big move is down
For the fifth session out of past six, emini markets went absolutely nowhere yesterday. Other than last Tuesday’s sweet
rally and the one-hour stretch from 2:00pm thru 3:00pm EST on Wednesday, stock
index markets have traded inside choppy little micro-range coils. That will not
last much longer. Price action is poised to break, and probably big. Whether
that lasts one – two days or couple of weeks remains unknown. We do know for an
absolute fact that a directional break is imminent.
When the price break ensues, please do not fade
or fight its direction. Go with the flow and you’ll make money. Fight the
breakout trend with reversal mentality, and you will likely get hammered. Simple
as that.
Lastly, Chris Curran reported yesterday that
the COT (Commitment Of Traders) report shows large commercial traders holding a
3-year extreme net short position. That is the stuff market turns are made of…
in favor of the big boys. Large commercial traders ARE the stock market. If they
are selling into the latest rise, guess who becomes their liquidity on the
massive exit? You got it… retail traders buying every dip like Google is still
a $150 stock.
Summation
Short-term, markets are due to make a sharp directional break that will plow
thru layers of reversal traders in its wake. Long-term, the biggest players in
our professional appear to be building net-short positions in obverse extremes
to new market highs. What does that suggest to you? It suggests to me that the
next 100+ point S&P move is likely to be lower.
Hopefully we’ll have directional markets to
report for Wednesday morning!
Trade To Win
Austin P
(Online video clip
tutorials…
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.