Yesterday, buy programs took control

From Tuesday’s post: ES has traded inside an
incredibly small series of intraday ranges… look for that to abate real soon.
The next 20+ index point session range lies not far ahead. If they break ’em
directionally, don’t fight the trend!

On Wednesday, the S&P 500 gave nothing but valid
buy signals past 10:00am est. There wasn’t an inkling of sell-signal thought in
our minds… just buy – buy – buy on every confirmed pull back.

Four distinct buy programs pushed price action
out of each consolidation with gusto. Unless traders entered ahead of those
program slams, it was a quiet time in between.

Russell 2000 futures, same story. Buy signals all
the way up that flag-pole rally, never once did we consider shorting into the
ramp. Trend was up on all charts, from monthly time frame right on down to
smallest intraday. The trend is your friend until its end, and the strength of
that uptrend was clearly visible in real-time trading for all.

S&P 500 futures went up strong on accelerated
volume. The past two sessions have traded nearly 1.2 million contracts… a lot
of them represent blown-out buy stops from stubborn shorts who ignored the trend
at their own peril.

In all fairness, we’ve seen one-day rallies like
this completely erased inside the following session. Anything is possible, for
sure. We do know that ES 1348 was a recent point of resistance that may well
magnetize price action for a test of support.

Russell 2000 futures did not go up nearly as
strong on comparative volume analysis. Matter of fact, overall volume has waned
since this sideways channel began on September 11th. If the small caps take out
745 on a daily closing basis, we should see volume accelerate and upside
continuation from there. If not, home in the range is where the ER will remain.


Thursday’s session has potential to be a
“sandwich” consolidation event, following Wednesday’s ramp while awaiting
Friday’s non-farm payroll nonsense numbers. The last time we had similar price
action was September 12th. The following session was also an uptrend, although
muted by comparison with deeper pull backs.

Expect a morning pop to follow the afternoon
trend. What follows from there remains to be seen, as always. Nice to see volume
and intraday range expansion… keep up the excellent work, emini markets!

Trade To Win

Austin P

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.