Low Volume and Drifty Chop

Mid-August period each calendar year includes seasonal low daily volume with choppy, drifty price behavior. You wouldn’t know it by the recent weather around here prior to right now, but financial markets sure act like the middle of summer has arrived already.

CL/ES 5 Minute Chart

Crude oil futures went from huge trend days and price flying all around the clock to comatose overnight and choppy, muted intraday. S&P 500 futures price behavior now resembles the Russell 2000 futures symbol years ago in its heyday, before the algos domination did it in.

ES remains the most liquid futures contract in terms of turning trade size by a wide margin against all other popular symbols. Matter of fact, no others can even come close to handling the trade size that ES can and that becomes more pronounced as volume wanes while time marches on.

ES 1 Minute Chart

I personally focus on ES in part for that reality alone… nothing else, not even CL can even approach it with ability to trade size. But apart from that, ES trades well enough to offer potential for any serious intraday trader to prosper from.

Today’s trade sequences for me as profiled in the live room filled with active members went like this…

#1: long 2086 > out 2086 = 0 points / swing high 2090 or +4pts in favor and v-turned right back down. I was looking to trail-stop +4pts if price merely went two or more ticks higher than it did. C’est la vie

#2: short 2085 > stopped 2086 = -1 point / a first-confirm sell signal that popped back up to pivotal 2086+ zone of clustered intraday resistance.

#3: short 2086.50 > closed 2079.00 = +7.50 points / shorted a pullback stall into aforementioned layers of resistance.

#3a: short 2082.00 > closed 2079.00 = +3.00 points / shorted a breakdown confirm below all pertinent intraday support.

#4: short 2079 > stopped 2080 = -1 point / shorted pullback to support which of course did not hold.

One par, two wins, two losses via 40% win rate overall. Five turns for +8.50 index points / $425 (per each ES contract) cumulative = +$85 avg gross profit per trade before costs. Even at $4 per turn that is still +$65 per contract turned net of costs.

Nothing wrong with any of that math for my purposes… and now at 20+ points per contract for this month with more than half the month still left to go means plenty of to double these results, and more

Trade Well

For more daily updates from Austin, visit his blog at Coiled Markets.