Emini Futures Trading Update- 28Mar2018

spx500-futures-chart-analysis-28mar2018Hello Folks, the S&P500 Emini futures are at 2610.00
Today’s Range: 2593.00 – 2633.50

The futures are holding above 2600, which is positive for now. Yesterday, they fell below 2600 twice and in between bounced up above 2630 and again fell back to 2600, hitting our absolute stop loss at 2600. The futures went above 2630 briefly, which is the safety zone, but fell back to 2600. The market has been more volatile than I expected because futures have come back to their 200 day SMA after testing it just 2 days back, which is very uncommon, and we got a cascade of stop losses till 2593.

We had a high quality set up at 2650, which hit stop loss at 2630. And unfortunately 2630 was picked up in the bounce from 2600, and that breakout failed. That breakout setup at 2630 came for the first time after 07 March 2018, after nearly 3 weeks, so we trusted it, like many others, but it failed. There is enormous stress in the market currently, and 2600 is the last point of long trade. Continue reading →

Emini Futures Trading Update- 22Mar2018

spx500-futures-daily-chart-analysis-22mar2018
Hello Folks, the S&P500 Emini futures are at 2637.00
Today’s Range: 2634.25 – 2726.25

Today has been a very tough day in the market, as stop losses have cascaded from 2700 to 2650, and trading algos of large fund houses are pumping shorts, while buyers are standing back to understand the situation. This has happened a few times before in last 5 years, including in Jan-Feb 2016. The trading algos reverse their trading from short to long in a second as they have no capital shortage, but we humans take time to get back.

Today is a melt down in the market with stop losses, with nearly 100 points fall in one day! The futures recovered from 2665 to 2690 and then fell again, causing further damage to newly created longs at 2670-2680. Such double hits are very rare within a day. The index is trading is large range, and that is why we have reduced our position size / number of contracts. Continue reading →

Emini Futures Trading Analysis- 02Mar2018

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The futures have bounced back from 2650 this week, and closed above 2673, which is the 20 week SMA. There is clear resistance at 2780 level. The futures are testing lower level support levels of 2600-2650 and recovering from those levels, which is a positive sign. The S&P500 Emini Futures have shown support at 2650 and resistance at 2780 – that’s the trading range for coming week. Many technical indicators are saying that this fall is over, and the market will now prepare for the next upmove towards new highs of 2900-2950 in the coming weeks/months. However, 2600-2650 maybe retested and 2500 can also come if 2600 breaks down. Therefore, any major long positions should be created above 2700 with 2680 as stop loss.

[Bonus Trade] Buy S&P500 Emini Futures at 2670 for Target 2710 with Stop loss 2650.
That’s 40 points gain with 20 point stop loss.

S&500 Futures Weekly Chart – Technical Analysis
Date: Friday, March 02, 2018

Moving Average Indicator: Price is above the moving average so the trend is up. In the short term, the market is bearish because the fast moving average is below the slow moving average. Even though based on conventional interpretation the market is technically bearish, we will not classify it as extremely bearish until the following occurs: the slow moving average slope is down from previous bar. In the long term, the market is bullish because the fast moving average is above the slow moving average. Even though based on conventional interpretation the market is technically bullish, we will not classify it as extremely bullish until the following occurs: price goes above the fast moving average, price goes above the slow moving average.

Bollinger Bands Indicator: The Bollinger Bands are indicating an oversold condition. An oversold reading occurs when the close is nearer to the bottom band than the top band. Volatility appears to be declining, as evidenced by a decreasing distance between the upper and lower bands over the last few bars. The market appears oversold, but may continue to become more oversold before reversing. Look for some price strength before taking any bullish positions based on this indicator.

Commodity Channel Index (CCI) Indicator: CCI (33) is in neutral territory. A signal is generated only when the CCI crosses above or below 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 (33) 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 (54) is in neutral territory. This indicator issues buy signals when the RSI line dips below the bottom line into the oversold zone; a sell signal is generated when the RSI rises above the top line into the overbought zone. RSI is somewhat overbought (RSI is at 54). However, this by itself isn’t a strong enough indication to signal a trade. Look for additional evidence before getting too bearish here.

MACD Indicator: MACD is in bearish 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 DOWN. MACD is in bearish territory.

Slow Stochastic Indicator: The stochastic is bearish because the SlowK line is below the SlowD line. The long term trend is UP. A good upward move is possible without SlowK being overbought. However, a down move in SlowK for this bar is a little concerning short term.

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- 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.