Today saw the YM, ES, NQ & TF close out their 4th quarter options contract for 2011. Each candle on the chartgrid below represents a one-Month Options Expiry period. Most of the price action after the large red July-August OPEX candle has taken place inside that candle’s range. The last three candles reflect indecision in these markets on consecutively lower volumes (large upper and lower wicks).
Unless renewed optimism enters equity markets on a global level in the new year, we could see these e-mini indices mirror a drop similar to the one that occurred in 2008 after the arrows that I’ve added. Granted, they may not fall to the same extent, but a fall (and, potentially, a substantial one) is possible, nonetheless…at least to the bottom of their Bollinger Bands.
Below is a Daily chartgrid of the YM, ES, NQ & TF. The YM, ES & TF are hovering around their 50 sma (red), while the NQ has been weaker of late. Next week, I’d be looking to see whether they move above or below this moving average, and on what kind of volumes. No doubt, volumes will be lighter, so we could see some volatile moves intraday.
