Emini Futures Trading Analysis- 01Apr2020


Hi, the S&P500 futures are at 2459.00, down 110 points or -4.30%
Today’s Range: 2453.50 – 2563.00

The futures were at 2611 when I mailed you yesterday,
and mentioned this in the market levels.
“- Safety will start above 2650 (we are almost there!)”

But the futures could not even go near 2650!
They reached 2635 and started facing selling pressure, and they are now below 2460, down 170 points since yesterday’s high. Its not hard for the futures to move up/down 30 points in the current market conditions with high volatility, but they could not even approach 2650 yesterday. It means the market is not yet ready for become safe and stable, which means more correction, till we get better conditions. In regular market conditions, the S&P500 futures can stay flat for a couple of days, but that’s not possible now. If the market can’t go up, it has go do down without any waiting. Continue reading

Emini Futures Trading Analysis- 25Mar2020


S&P500 Futures Technical Analysis: S&P500 futures closed today at 2467, and above their 10 day SMA for the first time since 20 Feb 2020 (20/02/2020) — it was a very eventful date, from where this entire major correction started. 2200 is the support for this week, and 2600 is the upside target. 2500 was the first target, which has been achieved today. The volatility is still very high to trade with small stop losses. Today is the first day in last one month, when the futures have done two consecutive green days.

S&P500 Emini Futures Trading Strategy: Traders looking to trade for 100-120 points gain can with can stay long above 2400. Today’s low was 2387, so 2380 is the absolute stop loss on any long positions. The futures bounced back from 2174 on Monday, 23 March 2020. Therefore, below 2170, fresh breakdown can happen. Keeping 2400 as stop loss will protect from any major downsides. We can’t be sure if a bottom has been made in the markets, because the coronavirus cases are still increasing. So we have to keep position size very small on any trade.

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. Continue reading

Emini Futures Trading Analysis- 29Dec2017


S&500 Futures Weekly Chart Analysis:

  • Clear resistance / selling pressure at 2700 level got reconfirmed this week as the futures failed to cross 2700 and fell back sharply on the last trading day of the year.
  • The next support is at 2630-2650 level, so the futures are likely to test these levels in Jan 2018.
  • The next lower support is at 2580 level, and this should be a strong support because it was tested multiple times spanning several weeks. Any regular correction should find support at 2580 level.
  • 2500 remains a high probability target on the lower side for H1 2018. If it is tested successfully, then upside targets of 2800+ will open up / come in the picture.
  • Traders must be ready for volatility as 2018 is likely to show some volatility consolidation pattern after the clean upmove of 2017, which never broke the uptrend even once.
  • Our broad S&P500 Futures Trading Strategy will be to buy on corrections of 40-50 points, for bounce back after a few days. And we will buy afresh on breakouts after consolidation, because such breakouts have typically given 30-50 points.

Technical Analysis of Weekly Charts

Moving Average Indicator: Price is above the moving average so the market trend is up. The market is Bullish. Everything in this indicator is pointing to higher prices in the coming weeks.

Bollinger Bands Indicator: The Bollinger Bands are indicating an overbought market. An overbought reading 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. Look for some 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 (102) 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 indicating an overbought market, and appears to be slowing. Further, a bearish key reversal off a 9 bar new high here supports this outlook. A modest downturn is possible here.

Commodity Channel Index (CCI) Indicator: CCI (130) 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 (130) 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 (81) has issued a bearish signal. When RSI crosses above the overbought line (currently set at 80.00) a sell signal is issued. RSI is in overbought territory and has reversed, offering a reasonably strong bearish signal. Supporting this outlook, the bearish key reversal off a 9 bar new high here also indicates the potential for a decline.

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. However, the recent downturn in the MacdMA may indicate a short term decline within the next few bars. A bearish key reversal off a 9 bar new high here confirms this bearish outlook.

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.

Volume Indicator: 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. A bearish key reversal off a 5 bar new high here here suggests a decline, and decreasing volume supports the likelihood of a downturn in the market.

Slow Stochastic Indicator: The SlowK line crossed below the SlowD line; this indicates a sell signal. The stochastic is in overbought territory (SlowK is at 92.43); 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.

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