Watch these 4 charts to find today’s setups
Chalk it up to anything you like:
inflation woes, earning warnings due to soaring oil prices (duh… who didn’t
know that would be an issue?) or tax-loss selling by mutual funds. Regardless
the cause, stock markets have been pounded to lower levels of support since
Tuesday afternoon. Normal pullback before launching to new recent highs?
Beginning of the customary October swoon or more?
S&P 500 has shed -40 points inside of the past
two sessions. Quick visual check shows that to be widest measure since May, and
there are two sessions left to go.
1189 zone is next strong magnet below and
substantial layered support at that. If hit, I would expect a strong reflexive
bounce from there. First test of trend support is usually painful for the
bears… if only for a little while.
Russell 2000 found a pause at recent weekly
chart magnet where eight of the past sixteen weekly candles have visited. 620
zone is next strong layered mesh of support visible on this chart, probable to
be tested sooner than later.
ES (+$50 per index point)
S&P 500 made three legs lower yesterday, the
last one deepest of all. We see where 1215 level was a zone of resistance
yesterday that held multiple (but feeble) tests upward. Today we should suspect
the 1209 level to mark session highs if touched.
ER (+$100 per index point)
Russell 2000 futuresÂ came to rest on layered
magnetism as noted in the weekly chart above. 654 is probable to contain any
upside thrust today, and high-odds point to sell short at or buy on a candle
This session is a classic “sandwich” between considerable movement
prior and awaited econ reports tomorrow. We’ve seen price action go from pancake
flat to absolutely wild with no middle ground in between. This reminds one very
much of years 2000 and 2001… big swings up and down between trend moves.
Overall, price action is not trending either way but volatility is definitely on
the rise. I sure hope we see more of the same from now thru the end of this year
and beyond: it is the stuff intraday traders dream of!
Trade To Win
(free pivot point calculator, much more inside)
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.