Emini Futures Trading Analysis- 24Mar2020


Hello Folks, the S&P500 futures closed at 2380.00
Today’s Range: 2216.00 – 2387.75

It has been a week since the last mail, but we were all watching the unprecedented volatility in the futures. Trading in such conditions is like going into a tsunami with a raft, and there is no positive outcome possible without taking sizeable risk. And that’s not possible in the structure of this service, where we want to take trades with upto 20
points stop loss. In the current conditions, any trade with less than 50 points stop loss
does not have any chance.

Key Levels for S&P500 Futures trading:

  • Basic stability will start above 2500.
  • Safety will start above 2800.
  • Reliable trades with low volatility will come above 3000.

The futures are very likely to test 2500 this week, on the back of the stimulus package being planned by the US Govt. Currently at 2380. So 130 points upside is visible, but downside can be 100-150 points, which makes it very difficult to capture it as a futures trade.

Our minimum upside for this year is currently 3000, which should come once more before any major correction below 2000 level. I believe we can see a retest of 3300 by Dec 2020 if the Coronavirus is controlled by July-August, and the futures are holding above 2500. The key level is 2500, and if the futures can hold above 2500, an uptrend will start again.

For the last two weeks, I have been watching this chart closely.

VIX is the volatility index, and it has shot up to historic high levels in last 4 weeks, and it has to come down for the markets to stabilize.

While these are difficult conditions for futures trading, these are ideal conditions for buying leveraged ETFs like SPXL (as mentioned in previous mail), so we have bought it in our account. If you have spare cash, you may consider buying some shares of this ETF. Its currently at $21 and reliable upside targets is $31 in the near term, and $45-50 is possible by Dec 2020.

We will get good opportunities once stability returns, and sentiment improves. As of now, the US markets are leading the world in recovery of market sentiment. And we should expect nothing less from S&P500! We will wait for the market to stabilize. Thanks.

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