Emini Futures Trading Analysis- 12Aug2017

Hello Folks, the S&P500 Emini futures closed at 2440.50
Last week was outright bearish for the S&P500 index, for whatever reasons. We all know the market has been moving up without major correction, and it was going to come sooner or later. I was up till 2 am last night and back up again early today morning to do my market study. The market is making me uneasy after a long time. We have been long with confidence since Jan-Feb 2016, and whatever stop-loss we had along the way, was due to market whipsaws, but not due to trend change. The upside targets were always intact. However, now that seems to be changing. My upside target of 2500 was almost achieved by the S&P500 index, which made a high of 2490 (just 10 points less than 2500). The futures went till 2488, and reversed, which was a bearish sign. But the next day gave a bullish reversal, which offered support to market, and then we got a 40 point cut from 2470 to 2430 the next day, which has wiped out most of the recent long positions.

Please see this daily chart of S&P500 Index ETF (SPY)
spy-etf-chart-11aug2017

The S&P500 index is literally sitting on support line at 2440. The index has used this support line a few times in recent months to bounce back and resume the uptrend. Every time the index tests the support line, the index will gain some strength, but the support line becomes weaker. One of these times, the support line will give away, and we may get 80-100 point fall within a week. It is this possibility of a sharp fall below 2440 that is making me rethink our trading strategy for August. We wanted to be cautious in August from the start, and the setup is looking weak.

We will have to start a short trade at some point, and I am thinking what that point would be. The market won’t give second chances in a correction, as we saw this week. The short trades tend to be 3-4X faster than long trades, and therefore, its very difficult to catch them midway unless we are already in the trade.

One way to handle such a situation is to buy and hold SPY put options. We have done this in the past, and in case of any large market fall, the Put options work like short futures, at a fraction of the cost of futures.

My recommendation is to hold this put option: SPY Sep 2017 240 Put
https://finance.yahoo.com/quote/SPY170915P00240000

Expiry Date: Sep 15, 2017. Last traded price was $2.60
Contract size is 100. So each Put option contract will cost $260. Traders can hold a few contracts. This will offer good protection/hedge in this market till its expiry, which is one month away, and much of the current volatility would play out by then. If the futures have to go fall by 100 points to 2350, they may do it in the next 4 weeks.

Please note: the above put option is a just a suggestion, and the setup looks suitable to hold some put options. You may consider it a Bonus Trade.

With S&P500 Emini Futures, we will aim to close our long trade between 2450-2460 on Monday/Tuesday, and we will look for a short trade below 2440. The futures have to move above 2475 for the current bearish pattern to end. That’s why I was thinking of staying long with target of 2473, but it looks less likely now, compared to a retest of 2410-2420 level. I will mail you separately for this because my analysis is not complete yet. It is complex when the futures have dropped quickly to a support line, and probability of further correction is high. Please wait for my next mail with specific next steps. Thanks.

Emini Futures Trading Analysis- 21July2017

spx500-futures-weekly-chart-21july2017

The S&P500 Emini Futures did a breakout from the 2400-2450 range that was holding the futures for last 6 weeks. This upmove is in line with our previous analysis of 2500 target for the S&P500, and it was only a matter of time that this upmove happened. We have been buying every correction below 2420, and also did a large trade from 2412 to 2438. A few other trades have been started from 2440-2450 level for targets of  2468-2480.

[Bonus Trade]: Buy Emini Futures at 2465 for Target 2485 with Stop 2450.

Support Levels: The futures will remain bullish above 2400, and therefore, 2400 should be the hard stop for all long positions. Of course, will prefer to work with 15-20 point stops in most cases. Traders should avoid long positions below 2400 level. The futures have strong support at 2350 and 2250, and any sudden large correction should find support between 2350 and 2250. Prediction of support levels in large correction will be futile. For trading purpose, we will wait for buying to come in, and some short covering indication, before we take a new trade at lower level.

Technical Analysis of S&P500 Emini Futures Weekly Chart

Commodity Channel Index (CCI) Indicator: CCI (141.66) recently crossed above the buy line into bullish territory, and is currently long. This long position should be liquidated when the CCI crosses back into the neutral center region. CCI often misses the early part of a new move because of the large amount of time spent out of the market in the neutral region. Initiating signals when CCI crosses zero, rather than waiting for CCI to cross out of the neutral region can often help overcome this. Given this interpretation, CCI (141.66) is currently long. The current long position position will be reversed when the CCI crosses below zero. Adding bullish pressure the market just reached a 45 bar new high.

RSI Indicator: RSI is in neutral territory (at 72). This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone. RSI is somewhat overbought (at 72), but given the 45 bar new high here, greater overbought levels are likely.

MACD Indicator: MACD continues to be in bearish territory this week too, but has not issued a signal here. MACD generates a signal when the FastMA crosses above or below the SlowMA. The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. MACD is in bearish territory. However, the recent upturn in the MacdMA may indicate a short term rally within the next few bars.

Slow Stochastic Indicator: This is in overbought territory (SlowK is at 91.95); this indicates a possible market drop maybe coming. The long term trend is UP. The short term trend is UP. Even though the stochastic is signaling that the market is overbought, don’t be fooled looking for a top here because of this indicator. The stochastic indicator is only good at picking tops in a Bear Market (in which we are not). Exit long position only if some other indicator tells you to.

Open Interest Indicator: Open Interest is in a downtrend based on a 9 bar moving average. While this is normal following delivery of nearer term contracts, be cautious. Decreasing open interest indicates lower liquidity.

Disclaimer: The above analysis is meant solely for the understanding of technical analysis of the S&P500 Emini Futures. It is not meant to provide any investment advice.

Emini Futures Trading Update- 14July2017

Hello Folks, the S&P500 Emini futures closed at 2456.50
Today’s Range: 2442.00 – 2461.25

The futures have broken out of the 2400-2450 range, which had in been in place for last 6 weeks. As I stated in various emails earlier, we have a long view with target 2500, so the futures are moving as per analysis. The futures have tested 2420 and 2430 levels multiple times in last 6 weeks, so crossing 2450 today is not a surprise at all. However, a retest of 2450 is likely before further upmove happens. The futures faced selling pressure at 2460 because of profit taking ahead of the weekend.

Traders with 1-2 contracts: There is no new trade as of now.
The set up is not reliable, and 10-20 point stop loss can get hit.

Traders with 5-10 contracts:
The following Optional/Tactical trade (from Wed, July 12) is currently on.
“Buy Emini Futures at 2440 for Target 2480 with Stop loss 2410.”

[Bonus Trade] Here is a new optional/tactical trade.
“Buy Emini Futures at 2455 for Target 2468 with Stop loss 2442.”
This trade can be done with 1-2 contracts. Thanks.

Emini Futures Trading Analysis- 07July2017

http://eminifuturestrading.biz/wp-content/uploads/2017/07/spx-futures-weekly-chart-07july2017.png

The above weekly chart of S&P500 futures show clear resistance at 2450 level, which the futures have not been able to cross in last 6 weeks, despite regular attempts.The futures have closed this week in the middle of the 2400-2450 range, which has been holding up in recent weeks. The futures have strong support at 2350 and 2200 levels. While 2350 may not hold in case of strong selling pressure, we can expect 2200 to hold despite selling pressure.

Technical Analysis of S&P500 Emini Futures Weekly Chart

Moving Average Indicator:  The market has been extremely bullish in recent weeks, however currently the market is consolidating at 2420-2430 level for last 6 weeks. This is bullish and positive for the long side trades. Any dips towards 2400-2410 can be used for buying. In fact all rates below 2420 are good buying opportunity, because 2440-2445 is most likely to come in July again, giving 20-25 points gain.

Momentum Indicator: Momentum (42.00) is above zero, indicating an overbought market. The long term trend, based on a 45 bar moving average, is UP. The short term trend, based on a 9 bar moving average, is UP. Momentum is in bullish territory and upmove is likely towards 2440-2450 by July end. Continue reading

Emini Futures Trading Update- 19June2017

Hello Folks, we have successfully completed the following optional/tactical trades today:

(a) “Buy Emini Futures at 2439 for Target 2449 with Stop loss 2430.”
— given today morning with +10 points gain

(b) “Buy Emini Futures at 2434 for Target 2445 with Stop loss 2420.”
— given on Saturday morning with +11 points gain

Total gain: +21 points on 1-2 contracts for Traders with 5-10 contracts.

—————————- Original Message —————————-
Subject: Re: Emini Futures Trading – 19 June 2017
From: info@eminifuturestrading.biz
Date: Mon, June 19, 2017 3:00 pm
To: Emini Futures Traders
————————————————————————–
Hello Folks, the S&P500 Emini futures are at 2446.25
Today’s Range (so far): 2432.75 – 2450.75

The latest optional trade given today morning has completed successfully (from 2439 to 2449) with 10 points gain. The futures finally hit our initial target of 2450, though we reduced the target by 1 point to 2449. The multiple retests of 2420 last week were in preparation for 2450, which has come today.

Traders with 5-10 contracts: Here is a new optional/tactical trade.
“Buy Emini Futures at 2446 for Target 2456 with Stop loss 2435.”
This trade was to be done with 1-2 contracts. Thanks.

—————————- Original Message —————————-
Subject: Re: Emini Futures Trading – 19 June 2017
From: info@eminifuturestrading.biz
Date: Mon, June 19, 2017 11:03 am
To: Emini Futures Traders
————————————————————————–

Hello Folks, the S&P500 Emini futures are at 2447.00
Today’s Range (so far): 2432.75 – 2449.75

The futures have moving up as per our analysis, and the recent optional trade suggested on the weekend (2434 to 2445) has got completed with 11 points gain. The latest optional trade given today morning (2439 to 2450) missed executing my 0.25 points as futures reversed from 2449.75.

Traders with 5-10 contracts: Please note the revised target and stop loss for this optional/tactical trade given earlier today.
“Buy Emini Futures at 2439 for Target 2449 with Stop loss 2439.”
This trade was to be done with 1-2 contracts.

Traders with 1-2 contracts: If we had less than 20 points in the bag this month, we would have taken up a new general trade from 2434 to 2445, which was given as optional trade today morning to traders with 5-10 contracts. By June 21st, it would be 1 week after the US Fed policy, and adjustments by large investors maybe completed. Then we may consider a new general trade. Thanks.

—————————- Original Message —————————-
Subject: Emini Futures Trading – 19 June 2017
From: info@eminifuturestrading.biz
Date: Mon, June 19, 2017 8:20 am
To: Emini Futures Traders
————————————————————————–

Hello Folks, the S&P500 Emini futures are at 2438.50
Today’s Range (so far): 2432.75 – 2440.25

The futures are moving up as per our analysis after Friday market close. But we are still in US Fed policy adjustment period, and 10-20 point volatility can come without any prior indication even this week, so we could lose 10-15 points in stop loss even in a good setup like the current one. Therefore, we will not do a new general trade as of now. We will continue doing optional trades, which expose a smaller amount of capital, typically 10-20% capital per trade.

Traders with 5-10 contracts: Here is a new optional/tactical trade.
“Buy Emini Futures at 2439 for Target 2450 with Stop loss 2430.”
This trade can be done with 1-2 contracts.

The following optional/tactical trades are on currently.
(a) “Buy Emini Futures at 2439 for Target 2450 with Stop loss 2430.”
(b) “Buy Emini Futures at 2434 for Target 2445 with Stop loss 2420.”
(c) “Buy Emini Futures at 2430 for Target 2495 with Stop loss 2400.”

Trade(c) is a long range one, which may take a several weeks.
All these trades are to be done with 1-2 contracts each. Thanks.