Emini Futures Trading Analysis- 24Jan2020


If you were actively trading SP500 Futures this week, then this post is for you.

Friday’s intraday fall of 56 points in SP500 futures was unexpected and it caught almost everybody by suprise, and it broke many long positions that were created based on the strong bullish move of Thursday, Jan 23. The fall is being attributed to China Coronavirus concerns on global growth, which caused cascading Stop losses on various long positions between 3320 to 3290.

We got a sense of something not going right at 3323-3325 level because the futures should not have come back there today at all! Plus the fact that they did not make a new high today and they could not cross the previous high of 3337, made things bearish at 3325. That’s when we decided to close the ongoing long trade at or near cost price. Some traders who wanted to hold a few long positions with 3300 Stop loss also got hit, and our final Stop loss on all long postions was 3290, which was also hit.

While a retest of 3300 support level was looking possible from the start of the week, a test of 3280 within the same session was not visible. It shows that a significant amount of long positions got hit with Stop loss yesterday.

But the SP500 futures uptrend, which started in Oct 2019, is still intact, and fresh long positions can be created above 3300 for targets of 3330-3350. The support level is at 3370-3380, but we have to be careful, because below 3300, even 3250 level can get tested in the coming week – it depends on the intensity of negative news coming from China.

The futures will rapidly gain strength above 3300, and Traders should consider adding new long positions, plus all the Stop loss positions will also attempt to add back their long positions. Therefore the price recovery above 3300 can be rapid. The range for next week can be 3250 on downside and 3350 on upside. A more likely range would be 3270 to 3330. So, we are seeing 3330 level coming back at least once, and we should aim to use that. Thanks.

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