Today’s bias is to the upside

Tuesday’s session was little more than
a gyrational, sideways jam.
We could say the eminis worked their way lower from
open to close, but it was a noisy, rather ugly tape in structure. The recent
majority of days have been directional: last session of the month here in front
of us may follow suit.

ES (+$50 per index point)

S&P 500 chopped its way down the chart on
Tuesday. Spike and surge moves negated any type of trade success save for small
swings or scalps. Pretty tough to hold any type of stop-loss order thru those
gyrations, other than selling peaks and covering a few points lower in the dips.

ER (+$100 per index point)

Russell 2000 was relatively weaker than ES all
day, something we’ve seen thru this entire year-end rally so far. Sideways chop
from bell to bell… tough to catch profitable swings lower while missing the
spike moves upward along the way. A day of rest from directional action,
sideways consolidation until the next push to come.

This Session:

ES (+$50 per index point)

Daily chart picture shows inside session held
Monday lows to the tick. A break of either Monday lows or highs will cascade
some stop orders clustered just outside those marks. Support levels below remain
channel midline and retracements from there.

ER (+$100 per index point)

Small caps posted a micro-range, “doji” day of
indecision. Relatively weaker than the S&P for more than a month, nearer to
support levels in the process.


Wednesday is of course the end-month session. No upside ramp by the
big money players happened yesterday. We might see that today… a definite
upside historical bias exists for the next couple of days that simply cannot be
ignored. Yesterday we had multiple sell signals that worked for a couple of
points, only to get slapped right back up thru the initial entry point. Typical
of end-month games: weakness cannot gain traction even when buyers boycott the
market. Long trades have historical bias to work, and short trades signaled may
best be played with 1/2 normal contract size and/or closed out for smaller than
normal profit targets.

One trend session lower on Monday, one slightly
lower close in moderate chop yesterday. Whether the rally resumes today or
continues to slide from the end of this week remains to be seen. We’ll trade the
direction of our directional filters as usual, and stand aside until trade chart
signals are clear. Business as usual, with a nod toward the upside knowing how
the big funds usually play around with today.

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.