<b>Emini markets:</b>
Most traders think the fall trading season kicks off day after Labor Day. They expect an instant return to volume and volatility. If I recall, Sep 2000 kicked off with waves of selling that spilled into the month. Since then, it is usually the second week or later before tapes get rockin'
Next FOMC event is Wednesday, September 20th. We're only 7.5 trading sessions away from the 2:15pm news. It is highly probable the markets will remain sideways or volatile - choppy until then. It'd be my guess that volatility ramps up in a big way from 9/21 into late October or beyond.
Last two ES sessions held inside a 10pt total range, all wedged up. Monday morning will probably drift & chop thru the 9/11 Memorial observances of silence on the floors, etc.
It is also possible that emotional sentiment will be resistant to shorting most of the day, maybe all day. But, if the market does anything but bull-flag higher in 45 degree trendline fashion, odds are it sells off hard into the closing bell.
Either way, expect a strong directional push to grace our charts sometime tomorrow or Tuesday. The recent wedging has index charts primed for a big move. If they take the tapes one way in morning and reverse hard in the afternoon, I will sell or buy into that late-day push with xtra contract size.
If my allotted size is 10 ER and 20 ES contracts, that's what I'll trade if price action swings around. However, if we see an afternoon trend move start to cascade up or down, I'll leg into 20 - 40 ER and/or ES contracts past 2:00pm EST.
What I do there is trail stops on first position to par, then open a second whole position at clear continuation signals. I'm holding twice my usual leverage, but only risking normal loss of initial capital <i>and</i> unrealized gains on the first whole position.
One - three times per month on average we see a strong directional push all session, or in the final two hours of trading. Charts are poised to break one of those real soon. Beware trying to sell tops or buy bottoms if price action pushes outside Thursday's range... especially in the late afternoon. Going with the flow on our next directional break will probably run a lot further than most emini traders can imagine, on a short-term basis or otherwise.
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That's a wrap for me tonight... gotta end things in here on a positive note. Wouldn't this forum be a far better place if no negativity existed, and traders all treated one another like friends at a backyard party?
Imagine that
