Emini Futures Trading Update- 17Nov2016

The S&P500 Emini futures are currently at 2180. The futures are moving up quickly on market open, probably after seeing the US Fed commentary from Janet Yellen, that the rate hike in Dec will be along expected lines (25 bps), which is already factored (supposedly) in the current price.

So there a fresh short-term buy signal this morning above 2175, and the futures are moving up in a very clear way. Traders can stay long above 2173-2175 levels and aim for 2183-2185 levels.

This clear upmove helps up to put a tighter stop because if this upmove reverses, then it can easily fall to 2160 and we don’t want to hold the long anymore in such a case. The Stop Loss for any long position should be at 2172-2173. This is one of the rarer cases when we can put a tight 5 point stop below buying level, because we don’t want to part of any downward reversal from current level.

Please Note: Dec 2016 is the month of US Fed rate hike meeting. Dec 2015 was the most deceptive month of year 2016, when almost every every analysis produced wrong trades and we got lot of whipsaws.

The key learning from Dec 2015 was to be very careful with Dec month around the US Fed meeting. In Dec, many US funds are winding down their positions and market participation could be less (though unlikely this year because of new President factor), which can create larger swings. We must be very cautious. Thanks.

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