Hello Folks, the S&P500 Emini Futures Hit 2200 Today! As regular website visitors and our subscribers will note, 2200 was our long pending target above 2134 (the previous high on the S&P500 index). Past charts have indicated that once S&P500 breaks its high (2134), it will go and hit the next higher round number level, which was 2200 in this case.
But this upmove has come with a twist. The futures fell to 2040 on US Election day and then bounced back — after offloading many longs and collecting many new shorts — which made this upmove possible. This rise has come while global markets are flat or falling, so we should be cautious about any abrupt reversal of US market sentiment.
We have been constantly long above 2100 — with 2180 as Target#1, and 2200 as Target#2. Both have been hit this month, making Nov 2016 once of the very profitable months.
What happens next? There may be resistance at 2209-2210 level. Selling pressure can come between 2205-2210 on futures, from some profitable long positions deciding to exit. Very few shorts will enter till weakness appears, and weakness will appear below 2180. Strength will appear above 2210 (on S&P500 index ). Above 2210, the index can go to 2234, and Emini Futures can go till 2230.
Bonus Trade: Traders can remain long above 2200 for target 2220-2230 and 2190 as stop loss.
The S&P500 Emini futures are currently at 2180. The futures are moving up quickly on market open, probably after seeing the US Fed commentary from Janet Yellen, that the rate hike in Dec will be along expected lines (25 bps), which is already factored (supposedly) in the current price.
So there a fresh short-term buy signal this morning above 2175, and the futures are moving up in a very clear way. Traders can stay long above 2173-2175 levels and aim for 2183-2185 levels.
This clear upmove helps up to put a tighter stop because if this upmove reverses, then it can easily fall to 2160 and we don’t want to hold the long anymore in such a case. The Stop Loss for any long position should be at 2172-2173. This is one of the rarer cases when we can put a tight 5 point stop below buying level, because we don’t want to part of any downward reversal from current level.
Please Note: Dec 2016 is the month of US Fed rate hike meeting. Dec 2015 was the most deceptive month of year 2016, when almost every every analysis produced wrong trades and we got lot of whipsaws.
The key learning from Dec 2015 was to be very careful with Dec month around the US Fed meeting. In Dec, many US funds are winding down their positions and market participation could be less (though unlikely this year because of new President factor), which can create larger swings. We must be very cautious. Thanks.
Nov 08, 2016. New York City. US Elections are in progress.
Here is a bonus trade for all our website visitors.
Buy Emini Futures at 2135 for target 2165 with Stop 2115.
There are still enough shorts by hedge funds, etc though many have already closed in the last 24 hours giving 60 points gain so far. But the sharp rally indicates there is more upside. Once S&P500 index is above 2134, it is in safe zone, and it will make another attempt for 2200. Thanks.
Trade Update: Nov 08, 2016. Target 2140 was hit today, giving 60 points gain on this trade. Cheers to Hillary Clinton!
Following is the trade sent to our subscribers on Friday, Nov 04, 2016.
Hello Folks, the S&P500 Emini futures are at 2080.
Here is our next trade. Please Note: This is only for traders who are
trading with 5-10 contracts. This trade can be done with 1-2 contracts.
Trade#4 of Nov 2016
Buy Emini Futures at/above 2080 for target 2140 with Stop 2050.
Please do this trade only if you can enter the stop loss in your system.
Manual stop loss won’t work in this case because the market will move rapidly in the coming 2-3 days.
There are a large number of shorts by hedge funds, etc that will want to get out in a hurry once positive news comes, so you will see big spikes. Once S&P500 index is above 2134, it is in safe zone, and it will make another attempt for 2200. Thanks.
The above chart clearly shows a strong support zone between 2100-2120 for the S&P500 futures. They have bounced back from this support zone twice in recent days, so we can expect an upmove of 40-50 points from the support zone of 2100-2120 before any fresh selling pressure gets applied by the short sellers. So potential upside target is 2150-2160. We can be sure that there short sellers because many fund managers will try to hedge their equity portfolios by shorting the S&P500 Futures. And then there will be some naked short sellers who are convinced of lower targets after US Elections in November 2016. Therefore, we have to book trading profits in the 2150-2160 range without becoming greedy. A real long trade with high conviction can start only above 2200, which will then involve massive short covering and immediate target in that case would be 2240. We will discuss that trade when we get there. There are many roadblocks before that, because the daily charts are showing that medium-term market trend is down until 2180 is crossed. Continue reading