Two More Sessions This Month--This Is How I'm Trading Them

S&P 500 gapped down at the open, wedged around its daily pivot point and resumed the recovery from there. Our method signaled one short and two trade entries that were highly profitable overall for the day. Gotta love these directional sessions like this!

Today's initial support comes in near 1210.50 at the 38% mark, and bearish back below 1207.00 on a general basis. Let me clarify that these ARE NOT by any means the sole trading triggers, zones or anything like that for me. They are key points of action in most sessions as one can easily see by reviewing what we've marked in the past followed by next session's behavior. That fact is evident at a glance back thru these archives.

ES (+$50 per index point)

Many times we will get long or short triggers near or at the key zones, as happened yesterday. Often we get additional trade signals well away from these zones of action that are highly profitable as well. Just a point of clarity I'd like to add, lest anyone think these few lines on any chart are a complete method approach alone. They are not, but certainly mark where bulls and bears likely prevail.

NQ (+$20 per index point)

Monday was also a stair-step higher day offering solid profit potential past the opening drop. Nasdaq 100 has initial support near 1570 and begin looking bearish below 1564.

YM (+$5 per index point)

Dow Industrial futures walked upward in methodical fashion like all other emini symbols, offering similar profit potential as the rest. Today's initial support is being tested off the open of futures trading in Globex session. Not unless 10400 is broken on a closing basis will we have bearish confirmation to work with.

ER (+$100 per index point)

Russell 2000 futures are bullish above 653 and should have a cluster of buy-stop orders hovering near that mark. Same directional action yesterday as other symbols above, with usual greater dynamics. Our method offered short signal near 647.50, long signal near 647.50 and long signal near 653.00 as the day progressed.

Potential results of -$100, +$500 and +$300 per emini contract on these signals would eclipse potential of NQ and YM combined. For those who ask why I only trade the ES and ER, it is a mathematical fact of pure risk to potential reward ratios available in the market.

{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}

Summation
The bias is bullish heading into last two sessions this month. Mutual funds will be marking up stocks in "window dressing" fashion as we probably witnessed yesterday. When in doubt, hit the long side with a bit of bias and that should prevail into the next two session's close. By all means we will short the clear sell signals, just expect a fundamental upward pressure until September 1st arrives.

Late August has been much more tradable and potentially profitable than most of us feared. The last few years have been total dogs to trade during the Dog Days of August. Not this time! Four more sessions this week should offer solid setups before the holiday weekend and unofficial end of summer arrives.

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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.