Here's why I expect good price action today

Wednesday's session took a sharp turn higher at precisely 3:00pm EST. Pre-staged buy programs across the entire stock index market kicked in at that moment in time. What had been a somewhat drifty day ended quite bullish on its face... or so things seemed to appear. Let's take a peek at the daily charts to see where markets measure up as we approach the end of this trading week.

ES (+$50 per index point)

S&P 500 futures posted a modest 12pt total range yesterday, which is welcome relief from the inane 6pt daily ranges that have plagued this symbol too often for a year now. We'll take what we can get!

Price action found early lows and worked its way higher in rather drifty fashion until the final hour program-slam event. Session highs went right to 1269 resistance we pointed out in this forum yesterday. It'll take a break & close above 1278 before the bulls have cleared clustered sell stops between here and there. Look for 1270, 1274 and 1278 to be three price magnets (intraday) if traded to.

NQ (+$20 per index point)

Nasdaq 100 futures remain below layers of recent resistance. Most recent high-low swing (solid lines) shows 1682 as initial resistance, followed by a cluster up to 1700+. A break & close above 1702 on this daily chart is necessary to resume the uptrend in early January.

YM (+$5 per index point)

Dow futures have swung thru a 300-point gyrational roll for three complete legs and a potential 4th wave higher in this current move. The most recent high-low swing of roughly 250pts has retraced nearly 62% of that span. A break & close above 10900 should have the sideways range rolling upward again.

ER (+$100 per index point)

Russell 2000 futures remain 100% bullish thru the first part of 2006. Yesterday we saw a successful test of 62% support from most recent low-high swing, with price action stalling out just below 38% former support.

A break of yesterday lows on a closing basis would be quite bearish, and a daily close back above 725 would like wise be rather bullish. It remains to be seen whether small caps are leading the entire stock market upward from within current sideways gyrations, or if that index is the last Bastian standing before a fall.

Summation
Solid intraday trading action has graced our charts this week. We should expect the same or better to close out the final two sessions ahead, with much more to come. As for swing and trend trade potential? Those are games that require extreme patience and a bit of fortitude during sideways range markets like these. Short-term is the right timeframe to work within for now.

Trade To Win
Austin P
www.CoiledMarkets.com
(Online video clip tutorials... open access)

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.