Why I believe the market is setting up to rally

We’ll shift our format & presentation
in here a slight bit.
Let’s use this space going forward (what other direction
is there?) to review the ES and ER of previous day’s action and then preview the
next session ahead. Similar logic can be applied to any symbol (emini, stocks,
FX, commodities) while we focus on “the big pair” of intraday traders’ emini
symbols in here.

Previous Session:

ES (+$50 per index point)

S&P 500 lifted just far enough to close last
Wednesday’s gap, then fluttered lower from there. The ES felt “heavy” all day,
even when Russell kept twitching upwards with momentum players’ trying to press
the hot money index over there. The majority of profits were offered on that
downside move, before it reflexed back up to noted resistance into the close.

The 1223 level has been a sticking point over
the past several sessions and may continue to serve as such today. 1230 still
remains a point of resistance to note until price action breaks above with
emphasis or falls away to deeper levels, one or the other. Not much more to note
per yesterday’s action than that… it was a rather quiet affair until the
slight afternoon break churned its way lower to layers of short-term support.

ER (+$100 per index point)

Russell 2000 never got very far from its 62%
flytrap either way. One of the seven candles on this hourly chart yesterday
opened and closed off that line, while the other six candles traded right there
to open or close. Can we assume it will be a point of interest again today?

Both of our profitable ER trades were on the
short side yesterday too, although neither went more than +3.5 points from
entry. There was a long trade signal into the close that also offered +3.5 point
potential, but I had folded up shop by then. This index was a bull-bear struggle
all session yesterday, with no clear winner of the duel.

This Session:

ES (+$50 per index point)

S&P 500 is probably bearish below 1220 and
bullish above 1224, with upside bias going into the end of this week barring any
outside fundamental news unknown to markets at this time. Yesterday’s
directional move was down, but it happened in surge candle fashion with lots of
wicks and tails on the candles. Gyrational and not very orderly: it declined in

1235 and then 1245 are two points of magnetism
above resting price action this morning… both are viable targets before week’s
end if not much sooner.

ER (+$100 per index point) four>

Russell 2000 futures had a clear “W” shaped
session with legs down, up, down and up of nearly symmetrical measure yesterday.
Any break above those highs or lows will be pounced on by the momentum crowd…
although first breaks are often stop-runs by big players in our game.

The 675 level is a multiple magnet of
attraction… any upside lift this week due to fundamental reasons should test
or exceed that target with ease. Upside bias unless otherwise thwarted as we
head into the all-important month and quarter-end sessions ahead.


Monday was a scalper’s session… hard to hold trailed stops in the
Russell when it was so “poppy” in nature. Solid profits were offered in both
indexes, we did fine and no complaints. That said, some directional moves are
brewing this week and any upside lifts above noted resistance here should run to
recent high zones as mutual funds and hedge funds iron their curtains for window
dressing time.

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.