Emini Futures Trading Analysis- 29Sep2017

spx500-futures-weekly-chart-29sep2017

The S&P500 Emini Futures have closed at 2516 on Friday Sep 29, 2017, which is a new lifetime high for weekly closing. Following is our technical analysis of the weekly chart.

Moving Average Indicator: The market is very bullish because the fast moving average is above the slow moving average. Everything in this indicator is pointing to higher prices ahead.

Momentum Indicator: Momentum (46.50) 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 in bullish territory.upside move is likely. And, the market put in a 45 bar new high here. More highs are possible.

Rate of Change (ROC) Indicator: Rate of Change (1.88) 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. Rate of Change is in bullish territory. And, the market put in a 45 bar new high here. More highs are possible.

Commodity Channel Index (CCI) Indicator: CCI (160) 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. Please note that 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 (160) is bullish, but has begun showing some weakness. Begin looking for an attractive point to liquidate long positions and return to the sidelines.

RSI Indicator: RSI is in neutral territory. (RSI is at 70.74). 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 (RSI is at 70.74), but given the 45 bar new high here, greater overbought levels are likely.

MACD Indicator: MACD has given a bullish signal, which is generated when the FastMA crosses above the SlowMA, like in this case. 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. With the current trend to the upside, this suggests prices will continue to rise for a time. Further, the market just put in a 45 bar new high. Look for more new highs.

Volume Indicator: The current new high is not accompanied by increasing volume, suggesting that the current move lacks broad participation. Look for a retracement soon. The long term market trend, based on a 45 bar moving average, is UP. The short term market trend, based on a 5 bar moving average, is UP.The current new high is accompanied by an increase in volume over the last few sessions. In general this is bullish, but be careful to avoid an overbought market. RSI or MACD may be helpful here.

Slow Stochastic Indicator: The stochastic is in overbought territory (SlowK is at 93.67); this indicates a possible market drop is 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.

[Bonus Trade] Buy at 2515 for Target 2538 and Stop Loss 2500.
Trade Rationale: This trade offers 23 point gain with 15 point risk, and the probability of testing 2500 is low, given the large amount of time spent just below if before this latest breakout happened. Therefore, 2500 offers a strong support.

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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