Hello Folks, the S&P500 Emini Futures Hit 2200 Today! As regular website visitors and our subscribers will note, 2200 was our long pending target above 2134 (the previous high on the S&P500 index). Past charts have indicated that once S&P500 breaks its high (2134), it will go and hit the next higher round number level, which was 2200 in this case.
But this upmove has come with a twist. The futures fell to 2040 on US Election day and then bounced back — after offloading many longs and collecting many new shorts — which made this upmove possible. This rise has come while global markets are flat or falling, so we should be cautious about any abrupt reversal of US market sentiment.
We have been constantly long above 2100 — with 2180 as Target#1, and 2200 as Target#2. Both have been hit this month, making Nov 2016 once of the very profitable months.
What happens next? There may be resistance at 2209-2210 level. Selling pressure can come between 2205-2210 on futures, from some profitable long positions deciding to exit. Very few shorts will enter till weakness appears, and weakness will appear below 2180. Strength will appear above 2210 (on S&P500 index ). Above 2210, the index/futures can go to 2234 (which is 100 points gain above the previous high of 2134).
Bonus Trade: Traders can remain long above 2200 for target 2220-2230 and 2190 as stop loss.
The above chart clearly shows a strong support zone between 2100-2120 for the S&P500 futures. They have bounced back from this support zone twice in recent days, so we can expect an upmove of 40-50 points from the support zone of 2100-2120 before any fresh selling pressure gets applied by the short sellers. So potential upside target is 2150-2160. We can be sure that there short sellers because many fund managers will try to hedge their equity portfolios by shorting the S&P500 Futures. And then there will be some naked short sellers who are convinced of lower targets after US Elections in November 2016. Therefore, we have to book trading profits in the 2150-2160 range without becoming greedy. A real long trade with high conviction can start only above 2200, which will then involve massive short covering and immediate target in that case would be 2240. We will discuss that trade when we get there. There are many roadblocks before that, because the daily charts are showing that medium-term market trend is down until 2180 is crossed. Continue reading
New York, 3.45 pm EDT
Hello Folks, the S&P500 Emini futures are at 2127.50
The previous trade hit stop loss, and futures have bounced back.
Here is our next trade.
Trade#4 of Oct 2016
Buy Emini Futures at 2128 for target 2156 with Stop 2115
Trade Rationale: We are taking 13 points risk, for 28 points reward. And the set up is as good as it can get. Today, the bottom formation looks emphatic.
Please Note: Once the S&P500 Emini futures move above 2140, then the Stop Loss can be increased to 2128 (buying price), and target can remain 2156. Above 2153, the targets of 2175-2180 will restart. So the same trade can be continued, or a new trade can be taken.
Following is an email sent to our subscribers on Sep 02, 2016 afternoon.
Hello Folks, the S&P500 Emini futures closed at 2178.50.
Today’s range was: 2164.50 – 2183.75
Our target of 2173 was hit in the morning itself. In fact, the futures opened at 2176, so those traders who placed orders at market open would have got 2176-2180 as their selling price. Those traders who kept the orders in the system during pre-market hours would have got 2173 before market open. So we have got between 2173 and 2180 on different contracts based when they were placed for sale.
So our Trade#1 of Sep 2016 is completed successfully with 14 points gain. That’s a great start for Sep 2016. Thanks.
This is an actual email sent to subscribers on August 1, 2016.
Hello Folks, the futures are currently at 2163.
The S&P500 has been facing profit booking, but the upmove can start again
if corporate earnings play out well. The US Fed interest rate hikes are
now not seen become October, so that is a comfort factor for the market.
The base case for S&P500 index is to move higher towards target 2200.
But August has been volatile in recent years, bringing different reasons
every time. So we must be cautious. Downsides can emerge out of nowhere
and in such a case, long unwinding can rapidly take the S&P500 index back
to 2000-2050 levels. Continue reading