Emini Futures Trading Analysis- 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.

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