Emini Futures Trading Analysis- 17Oct2017

Hello Folks, the S&P500 Emini futures at 2556.75.
Today’s Range: 2552.25 – 2557.75
Please note the trade modification.
Trade#1 of Oct 2017 (updated target)
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Buy Emini Futures at 2552 for Target 2572 with Stop loss 2540.
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(Note: This trade was completed successfully on Oct 20, with 20 points gain)

The futures have moved well today. They showed strength despite intraday weakness. I saw the futures at 2553 in the morning, and was thinking that a close below 2550 will be negative, and a close above 2556 will be positive. The last several days of small narrow range days have set the stage for big move now. As stated yesterday, the probability of upmove is higher because the futures have been holding up above 2550. However, for any reason, if they go below 2550, then fresh selling can rapidly take the futures down to 2530-2535.

Please Note – Market Analysis: While we have been trading for 10-20 points gain per trade on the long side the whole year because the trend is up currently, my analysis over the weekend is showing a newly emerging downward bias on the monthly charts, with a reliable downside target of 2360. So even if the futures go to 2600-2650 level now, the downside target of 2360 is locked. Time frame prediction is very difficult. It may take 3-6 months, or it can happen much sooner by end of the year. We can be sure that the market has enough leveraged long positions to create a strong selling pressure once the correction and fear sets in.

But we don’t know/can’t predict how high futures will go before the correction. Therefore, for our trading work, we will continue doing long trades as long as the uptrend is intact. You will not get to hear of a 200 point downside target from current level anywhere in mainstream media as of now. Therefore, if the futures were to suddenly break down below 2500 on someday, we are not going to buy the dip anymore. We will wait for many more confirmation signals. Down move will accelerate below 2470 with a
reliable target of 2420, and we will look for short trade in that area based on confirmation of other indicators that I study of daily/weekly/monthly basis.

In our view, if you have gains in your equity portfolios and ETFs, its good to keep taking out those gains regularly, and do most of the trading/market exposure via S&P500 Emini futures because you can add/close positions rapidly with futures, and because we need to remain very alert and nimble at current market levels. Thanks.

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