What To Expect Today In The Indices…

Premarket futures are
slightly lower
and crude oil is back to new highs. Will this be the
day some stock index sellers appear? Regardless, past two miniscule range
sessions are coiling the charts tightly… we will see directional breakouts
soon, if only on an intraday basis.


S&P 500 gave a long trade signal on its daily
pivot support from 1239 and confirmed at 1240 as written yesterday. From there
it traded to 1247 by 12:30pm EST, and went straight sideways into the final
minutes after that. +7pt to +8pt long trade was on the table, one & done.

NQ (+$20 per index point)

Nasdaq 100 likewise hit its daily pivot on a
buy signal at 1616 and went to 1635.50 session highs by midday. That was it for
technology as well… dead flat coil strung out for hours afterward.

YM (+$5 per index point)

Dow Industrial futures hit daily pivot buy
signal near 10650 and confirmed breakout potential above 10665. Session highs of
10708 ended the lift, with balance of the day spent chopping its way lower on
the chart from there.

ER (+$100 per index point)

Russell 2000 futures missed hitting their daily
pivot (and my M.I.T. buy order) by three ticks before launching +$400 per
contract higher post-haste. The duration was endless chop & slop with slight
directional bias to the upside. There are simply zero sellers in small-cap land
right now: full bull ahead for the little stocks remains their mantra.  

(Price levels posted in charts above are
compiled from a number of different measurements. Over the course of time we
will see these varying levels magnetize = repel price action consistently)

Small Range Days Lead
To Large Range Days

I bought Larry Williams “Money Tree” video back in 1988 or so. That was in a
time prior to online brokers, online charts, online websites… or online
anything. Lots of interesting things in that package, one of which being the
fact that small range markets spawn large range markets, and vice-versa.


We are in a period of time where stock markets seemingly have to top. They
aren’t able to climb methodically higher, but with fits & jerks the tape somehow
manages to wind up towards the high end of its daily range. Lack of volatility
is only part of a day trader’s challenge: lack of appreciable price movement is
the problem.

We love days where the ES rallies in stair-step
fashion +20 points while VIX levels collapse. Who cares what that index reading
is on an actual basis? Much of its drop from 30+ to 10 or below came on the back
of northbound markets. Lots of very tradable days thru the rally from late 2002
until now.

At this point in time, no one seems interested
in selling stocks. Every dip finds willing buyers waiting in the wings. Each day
limps to new recent highs, but lately it’s been a very sideways market. that
should abate real soon, with directional fireworks probable straight ahead. Take
the clear trade signals your method gives you, avoid the midday period when
price action is sideways thru the morning and be patient… a few large-range
days will be sprinkled inside the month of August here!

Trade To

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.