This level is key for a year-end rally

Tuesday’s FOMC session was muted (as usual) ahead of the long-waited wording at
2:15pm EST.
There was a time, a long time in fact where the initial price move
following the Fed decision was false. Fading that initial reaction invariably
caught the real move going into those closing bells.

But not any more. That pattern has not worked
for the past several FOMC sessions, and certainly didn’t yesterday.

ES (+$50 per index point)

S&P 500 was on buy signal alignments all
morning, right into the Fed announcement. Incidentally, the same was true for NQ
and YM as well. Once the news broke, an upward burst of +10pts marked session
highs for the day. It was merely gyrational chop from there into the closing

ER (+$100 per index point)

Russell 2000 was 100% bearish going into the
news, as was the S&P 400 Midcap. The little stocks burst upward on buy programs
like all other minis, then slammed sideways thru a three point range for the
duration from there.

This Session:

ES (+$50 per index point)

S&P posted a bullish session yesterday, but
still sideways in a 20pt range for the past sixteen sessions straight. Today’s
post-FOMC action could be very telling, indeed.

ER (+$100 per index point)

Russell has trudged upwards in the same
three-week period of pure trading sessions noted in the ES above. That said, it
has failed repeated tests to break above 697 numerous times. A daily close above
there today would signal green lights for the year-end rally. A drop to 682 by
session’s end is not out of the question, either.


Today has potential to be a large-range and/or directional session.
Last two sessions of the week following this one are index and equity option
expiry events respectively. Any apparent trend move that appears to hold may
offer several continuation trades in that direction. Up or down, either way,
play the clear signals and avoid everything else in between!

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.