Watch these layers of support for entries

Wednesday’s session was a split
: small and mid-caps tried to rally all day while everything else
drifted sideways to lower. No window dressing event this month… big funds
stepped away from the tapes and let those curtains fall. One month from now,
we’ll see what gets hung by the chimney with care… bulls or bears!

ES (+$50 per index point)

S&P 500 was a dream to trade. We took the first
three short signals (hand drawn blue arrows) and booked +11pts per contract in
the process. After that, I watched the next series of sell signals work for the
same or more gains to boot. It was only a 12pt overall range, but the downtrend
action and methodical pull backs made it a no-brainer short bias all day.

ER (+$100 per index point)

Russell 2000 was a different story. Chop and
slop, big surge moves early on begat sideways rolling action into the close. Our
method tools warned us this symbol would be messy… and I therefore never
attempted to trade the ER all day. Indeed those trade tools were correct.

This Session:

ES (+$50 per index point)

S&Ps are nearing midline support of the
ascending channel around the 1245 level. If that one melts thru, look for 1234
to be hit in a hurry beyond there. Four days of price advance all last week have
been erased in the first three days this week. Normal pull back action down to
1234 and even 1220 level as well.

ER (+$100 per index point)

For the first time in seemingly ages, ER held
up while ES sold off intraday. Midline support near 670 is the next stopping
point below, followed by 660 and possibly 643 for what should be solid support.


The end-month sessions were a non-event. Indexes appear to be working
off their overbought condition in textbook fashion. If the slide continues,
there are visible layers of support below. A bounce back to new recent highs
will be tested by sellers, and that event would tell us everything we need to
know about how the year-end is shaping up.

From an intraday trader’s standpoint,
big-picture trend is less relevant. We seek +4pts to +8pts in the ES on average
more days than not. Some days are breakeven, some good for +12pts or more.
Knowing that a trend move is underway has far, far greater relevance than which
way it is going. At this moment in time the indices have paused to refresh,
reload or roll over. The outcome will soon be known!

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.