Emini Futures Trading Analysis- 11Jan2018


We know from past experience that Jan is often a trending month, and once a trend is established, all the investors rush to join the trend. Therefore, many of the investors who exited the market in December 2017, are trying to get back their long positions.

The S&P500 index futures closed today at 2769.50, or nearly 2770.have climbed sharply since Jan 1, 2018. The futures are now farthest from their support line, 70 points above the 20 day moving average, which is at 2700. Such a large move from the support line is not normal, and usually stalls for consolidation or correction. The level of 2750 has to be tested again for the current upmove to be reliable, so we have to work with tight stop loss.

However, we are not saying short the futures, we are just saying that the long side move has played very rapidly for various reasons, and it should stall between 2780-2800, and that traders should be very careful with long positions above 2780. The momentum of the current upmove should hit 2780.

[Bonus Trade] Buy S&P500 Emini Futures at 2770 for Target 2780 with Stop loss 2760.

Emini Futures Trading Analysis- 05Jan2018


Summary: The S&P500 futures are bullish on multiple indicators, and they can move up further before selling pressure can prevail. The S&P500 futures closed this week at 2742.50, and 2780 is the next upside target. It may come within next 1-2 weeks because the futures are moving up with high momentum, and the gradient of the current move is nearly vertical. It also seems to indicate that we are in some late stage of this bull market rally, where greed is all around, and fear is nowhere in sight. The major support levels are at: 2680, 2580, 2500.

[Bonus Trade] Buy S&P500 Emini Futures at 2742 for Target 2770 with Stop loss 2730.

S&500 Futures Weekly Chart – Technical Analysis
Date: Jan 05, 2018

Moving Average Indicator: Price is above the 20 day moving average so the market trend is up. Only long positions are needed. No question of short positions.

Bollinger Bands Indicator: The Bollinger Bands are indicating an overbought market, which occurs when the close is nearer to the top band than the bottom band. Volatility appears to be picking up a bit, as evidenced by an increasing distance between the upper and lower bands over the last few bars. The market appears overbought, but may continue to become more overbought before reversing. Given that we closed at a 45 bar new high, the chance for further bullish momentum is greatly increased. Look for clear evidence of price weakness before taking any bearish positions based on this indicator.

Volatility Indicator: Volatility is trending up based on a 9 bar moving average.

Momentum Indicator: Momentum (164) 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/ new highs are possible.

Commodity Channel Index (CCI) Indicator: The CCI (155) 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 (155) is currently long. The current long position position will be reversed when the CCI crosses below zero. The market just reached a 45 bar new high, adding bullish pressure.

RSI Indicator: RSI has issued a bearish signal (RSI is at 86.21). When RSI crosses above the overbought line (currently  set at 80.00) a sell signal is issued. While RSI is in overbought territory (RSI is at 86.21), the market may continue to become more overbought before a top is established, particularly given the 45 bar new high here. Look for a downturn in RSI before taking any bearish positions based on this indicator.

MACD Indicator: MACD is in bullish territory, 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 bullish territory. And, the market just put in a 45 bar new high here. Look for more new highs.

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, and lower willingness to participate at current levels. So don’t expect buyers to come in readily on small corrections.

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 not accompanied by increasing volume, suggesting that the current move lacks broad participation and the market may be overbought. A retracement is possible here.

Slow Stochastic Indicator: The SlowK line crossed above the SlowD line; this indicates a buy signal. The stochastic is in overbought territory (SlowK is at 96.05); 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 positions only if some other indicator is giving a strong sell signal.

Disclaimer: The above analysis is meant solely for the understanding of technical analysis of the S&P500 index futures. It is not meant to provide any investment advice.

Emini Futures Trading Update- 07Nov2017

Hello Folks, this is an early morning post on Nov 7th.
The S&P500 Emini futures at 2588.50
Today’s Range (so far): 2586.75 – 2593.50

Our Trade#2 has hit its target of 2591 in overnight trading. In fact 2593 was also hit, which was our earlier target, but 2593 is the technical edge of the resistance I am seeing for today, so that was not a bankable target. For today both 2591 and 2592 had nearly equal probability but 2591 would get us out with good profit sooner and that’s why I chose 2591 as the revised target last evening.

So we have achieved our monthly performance target of 20 points with 2 trades.
Trade#1: Long from 2573 to 2585 (+12 points)
Trade#2: Long from 2583 to 2591 (+08 points)

20 points in the current market are like 25-30 points in a market in more regular conditions with normal valuations and without several weeks of upmove behind us.

Here’s the end of day chart for Nov 7, 2017.

Futures Analysis and Trading Strategy: The yellow line is the support line for the futures and they have been testing it periodically. Problem will come when this support line breaks and the futures close below it. That will increase selling pressure, and the futures will immediately want to test 2540-2550 again, but there is no major support till 2500, which is 85 points below current level. Therefore, once should avoid long trades below 2570 till things stabilize and the charts show strong buying action at a particular level. Continue reading

Emini Futures Trading Analysis- 27Oct2017


S&P500 Market Analysis: The S&P500 index futures have been moving up week after week, for the last 10 weeks, which is one of the longest patch of green weeks with gains, without a red week. Traders should watch out for strong resistance at 2580 level. It will not be easy to cross. 2500 is a large long term target for this market, so reversal to 2500 is imminent or just a matter of time. We may do some more long trades while the trend us up, but we should not forget that 2500 can come any day, any week – it is a very real target for this market, and 2500 needs to be tested several times before a sustainable upmove above 2600 can happen.

S&P500 Support Levels: The two key support levels for the S&P500 futures are: 2500 and 2400, which will be useful to absorb minor sell-offs, and 2100 is a strong support that can defend against major sell offs. The long term support for this market is still at 1600, and that is not changing anytime soon. The zone between 1600 and 2100 should good for buying and holding for big gains. Continue reading

Emini Futures Trading Analysis- 17Oct2017

Hello Folks, the S&P500 Emini futures at 2556.75.
Today’s Range: 2552.25 – 2557.75
Please note the trade modification.
Trade#1 of Oct 2017 (updated target)
Buy Emini Futures at 2552 for Target 2572 with Stop loss 2540.
(Note: This trade was completed successfully on Oct 20, with 20 points gain)

The futures have moved well today. They showed strength despite intraday weakness. I saw the futures at 2553 in the morning, and was thinking that a close below 2550 will be negative, and a close above 2556 will be positive. The last several days of small narrow range days have set the stage for big move now. As stated yesterday, the probability of upmove is higher because the futures have been holding up above 2550. However, for any reason, if they go below 2550, then fresh selling can rapidly take the futures down to 2530-2535. Continue reading