E-mini stock futures volatility remains high

The Nasdaq Composite ($COMPX) ended the session higher by 20.14 points, or 0.73%, on Tuesday and it closed at 2,765.77. The strongest stocks in the Nasdaq-100 were Cephalon Inc. (CEPH) (+3.42%), Stericycle Inc. (SRCL) (+3.35%), Infosys Technologies (INFY) (+3.14%), and Expeditors Intl. (EXPD) (+3.08%). Vertex Pharmaceuticals (VRTX) (-5.68%), NVIDIA (NVDA) (-4.49%), and Apollo Group (APOL) (-1.95%), followed URBN and NFLX as the index's biggest losers.

Nasdaq Composite (Figure 3)

The trading channel that has been forming over the past two weeks in the indices currently lacks a strong breakout bias due to Tuesday's stronger upswing. Heading into the week the momentum was favoring at least a minor push lower out of the range, but only the Nasdaq is continuing to show stronger favor for such a move. I'm still favoring this corrective action as the week progresses, but it also continues to look like a break lower will be mild in terms of price and that the intraday swings on the 15 minute time frames will become more brief. This will increase risk for swingtraders attempting to play a breakdown from this range since daily triggers will more easily be forms of bear traps.

Unless otherwise stated, the index action described in this article relates to the E-mini futures contracts for the respective indices. Actual index action may differ slightly in terms of pattern formation, although the market bias will remain the same.

Toni Hansen is president and co-founder of the Bastiat Group Inc., DBA Trading From Main Street. Toni is one of the most respected technical analysts and traders in the industry. She has been trading and educating new traders, money managers, professional market analysts and traders throughout the boom and bust of the last decade. She has worked in conjunction with some of the world's top financial exchanges. Learn more about Toni Hansen and the educational services she provides through her website at http://www.tonihansen.com.

About the Author
Toni Hansen

Toni Hansen is president and co-founder of the Bastiat Group, Inc., DBA Trading From Main Street. Toni is one of the most respected technical analysts and traders in the industry. She has been trading and educating new traders, money managers, professional market analysts and traders throughout the boom and bust of the last decade. She has worked in conjunction with some of the world's top financial exchanges. Learn more about Toni Hansen and the educational services she provides through her website at http://www.tonihansen.com.

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