Watch this key level in ES

Following last week’s dramatic price
, Monday’s session was a day of rest. Emini indexes swung sideways through an
increasingly tighter range, with no further selling from Friday’s swoon.

ES (+$50 per index point)

S&P 500 futures sat very flat until nearly
11:00am EST, where they gave a scalper’s buy signal near 1268+ levels. That
worked up to 1272+ where a pivot sell signal was confirmed. That play worked its
way down to 1266.50 about an hour later, and the remainder of Monday saw price
action coiling into the close.

ES (+$50 per index point)

Daily chart view of the ES shows where price
action closed below 62% retrace of the “entire” (all three weeks of it) 2006
swing. That is a position of weakness, for sure. The 1282 level is a key pivot
on this chart for confirmed bullish or bearish bias.

If price action trades back up there and fails
to break thru on volume, load up on short side positions for a ride down to 1220
or lower. Should the index take out 1282 with relative ease, further upside
potential to new recent highs is probable.

(+$100 per index point)

Russell 2000 futures were much more active than
ES yesterday, as usual. That does not make trading them easier at all… just
more active.

Sell signal off the open worked its way +2.5pts
lower, where brief consolidation led to a scalper’s buy signal around the 709+
level. That one worked upwards to 711.60, where a pivot sell signal failed to
hold as price action spiked to 713.50 soon after.

A fourth trade signal, sell 711.00 or higher
confirmed on the subsequent break downward and fell to 709 before spiking
upwards again. At that point it was evident sideways churn was the modus for
Monday, and the trading session was effectively finished. Further scalp attempts
were possible, but price action whipped around in contracted fashion to the

(+$100 per index point)

Unlike the S&P, the ER has not sold off to any
appreciable degree from its current 2006 low to high swing. There is absolutely
nothing weak or bearish about this chart, unlike ES-YM-NQ daily charts. Small
caps are definitely still in vogue with market bulls.


Price action remains highly tradable, even in the sideways sessions like
yesterday. Should be a good to excellent week of price action, now that the
volatility kettle has been stirred a bit. We will trade our chart signals as
always, believing them to be the only correct bias in real time. Any other
opinions or beliefs based on logic & mental projections are always trumped by
what we actually see in the charts.

Trade To Win

Austin P

(Online video clip

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.