What the SOX must do to help the market

Wednesday’s stock index session was
another sideways roll thru the recent short-term range.
ES has clung to its 1198
~ 1200 zone since Monday, swinging a few points up or down since but always
returning to that mean. With a gap-down open looming ahead this morning, we
might finally see a release from this magnet.

ES (+$50 per index point)

S&P 500 topped out at its dual resistance mark
where channel top and 50% retrace of the October swing collide. 1197 may be
today’s market high if tested… and 1170s next downside magnet in sight.

ER (+$100 per index point)

Russell 2000 has 639+ as today’s upside
resistance, quite probable to post the session high near 640 if further selling
ensues. The 630 and 620 marks are firmly in the crosshairs here.


For all the tech lovers out there, here is your
market proxy. The SOX continues to post blatant weakness on its weekly trend
chart, not an iota of strength visible until a bullish close above resistance
takes place. Many pundits are calling for techs to rally strongly and see
this current action as a bottoming process. It could be but what we do know for
sure is that the SOX is weak, bearish and path of least resistance appears to be
lower right now.


The day’s bias is downside while price action is below ES 1197 and ER
640. End-month antics by the big funds propping tapes may appear in the next two
sessions, one of many reasons we can never be one-side biased when trading
intraday. That said, path of least resistance is lower right now, so we will be
hitting the sell signals aggressively on this side of the screen.

Trade To Win

Austin P


(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.