Emini Futures Trading Update – 23May2016

Our trading last week was far from optimal, and we had many stop losses from the daily change in market direction, just around our key level of 2053 in futures. The US Fed rate hike scenario in June significantly increased volatility and paused the upmove of the S&P500 which was clearly visible till a week back. In fact, we had a profitable trade with 15 points running when the US Fed meeting notes came out and that trade went down to hit 10 point stop loss within minutes.

Please see the chart below. The S&P500 futures have been trading in a narrow channel of about 45 points band, and they have been changing direction almost everyday, thereby hitting any stop loss that is less than 20-25 points, and then targets of 10-15 point targets are getting hit. Its like a mixer and its not profitable.

In such a scenario, the only way to trade without sacrificing stop losses is to widen the stop loss to the outer levels of the channel. So the stop for long trade would be 2020, and stop for short trade would be 2060 on the futures.

The uptrend which started in Feb has been closed in May after last week’s movement, and now there is a strong bias for downside moves. Long trades should be taken only above 2060, or at the lower end of the channel around 2025-2030 with a tight stop of 2020.

Bonus Trade: Buy S&P500 at 2080 for target 2090

Hello Folks, here’s a Bonus Trade for all our website visitors.
11:30 am US EST: Buy Emini Futures at S&P500 (spot price) between 2080-2083 for target 2089-2091. 10 points upside clearly visible. This price target may come today or it may come tomorrow. As mentioned across our website, we will trade with price targets, even if it means carrying positions overnight.

Update: 13:30 am US EST: This trade has moved very smoothly to hit our upside target of 2090 S&P500 (spot price) within 2 hours (though we were prepared to hold till eod tomorrow), and we have booked 10 points profit at 2091 S&P500 (spot price). The trade moved really well. Thank you S&P500!

Background Notes: The S&P500 index has taken support at 2070 today and is bouncing back after 5 days of non-stop fall losing about 65 points from the high of 2130. So, we can expect a bounce back back of 10-20 points least before further fall resumes or new uptrend starts, which we can’t say yet. Stay Tuned. Stay Alert. Keep positions light till 2100 is crossed.