Emini Futures Trading Analysis- 06Oct2017


Moving Average Indicator: The S&P500 Emini futures have been consistently above the 20 week moving average, so the trend is clearly up and the market will be strongly bullish above 2500 level.

Momentum Indicator: Momentum (75) 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 indicating an overbought market. However the market may continue to become more overbought. Given the 45 bar new high here this is even likely. Look for some evidenced weakness before getting too bearish here.

Commodity Channel Index (CCI) Indicator: CCI (213) 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 (213) 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 (74) is in neutral territory. 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. At 74, RSI is somewhat overbought, but given the 45 bar new high here, greater overbought levels are likely.

MACD Indicator: MACD is in bullish territory, 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 bullish territory. And, the market just put in a 45 bar new high here. Look for more new highs.

Slow Stochastic Indicator: It is in overbought territory (SlowK is at 94.86); this indicates a possible market drop is coming. The long term trend is UP, and the short term trend is also 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, because 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, or if a key support level like 2500 breaks.

[Bonus Trade] Buy at 2540 for Target 2565 and Stop Loss 2520.
Trade Rationale: This trade offers 25 point gain with 20 point risk.

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.

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