Emini Futures Trading Analysis- 11Jan2018

spx500-futures-daily-chart-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

spx500-futures-weekly-chart-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 Analysis- 29Dec2017

spx500-futures-weekly-chart-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.