Same Pattern, Two Different Markets

Today is Veteran's Day, a bank holiday, although the equity and futures market are open, I expected a slow, low volume day. Fortunately, a few minutes after market open, the Dow (YM) and S&P500 (ES) futures exhibited typical coincidental behavior that has become a high probability/large size trade in my trade plan.

Key characteristics of this trade:
1. Both YM and ES have price swings across the 50MA at similar time for their X and Y points,
2. Both YM and ES form an "A" point that measures as a double bottom or double top (78,6, 88.7, 112.8); the measurements between the markets do not need to be the same, merely the category,
3. 50 and 200MA must be positioned such that movement off the A point, toward the B target, will cross the 50MA first, then the 200MA.

The following chart is December YM on 89 tick. This is a smaller tick frame than I usually use, but selected it since I expected a lower than normal volume day.

Click to enlarge

The following chart is December ES on 377 tick. Also a smaller tick frame than I usually use.

Click to enlarge

Two different markets, exhibiting the same patterns at the same time. Watch for these coincidences to occur and track the frequency in which the market movements are aligned. This might become one of your primary set ups too.