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.
spx500-futures-daily-chart-analysis-07nov2017

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

Emini Futures Trading Analysis- 27Oct2017

spx500-futures-weekly-chart-27oct2017

S&P500 Market Analysis: The S&P500 index futures have been moving up week after week, for the last 10 weeks, which is one of the longest patch of green weeks with gains, without a red week. Traders should watch out for strong resistance at 2580 level. It will not be easy to cross. 2500 is a large long term target for this market, so reversal to 2500 is imminent or just a matter of time. We may do some more long trades while the trend us up, but we should not forget that 2500 can come any day, any week – it is a very real target for this market, and 2500 needs to be tested several times before a sustainable upmove above 2600 can happen.

S&P500 Support Levels: The two key support levels for the S&P500 futures are: 2500 and 2400, which will be useful to absorb minor sell-offs, and 2100 is a strong support that can defend against major sell offs. The long term support for this market is still at 1600, and that is not changing anytime soon. The zone between 1600 and 2100 should good for buying and holding for big gains. Continue reading

Emini Futures Trading Analysis- 17Oct2017

Hello Folks, the S&P500 Emini futures at 2556.75.
Today’s Range: 2552.25 – 2557.75
Please note the trade modification.
Trade#1 of Oct 2017 (updated target)
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Buy Emini Futures at 2552 for Target 2572 with Stop loss 2540.
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(Note: This trade was completed successfully on Oct 20, with 20 points gain)

The futures have moved well today. They showed strength despite intraday weakness. I saw the futures at 2553 in the morning, and was thinking that a close below 2550 will be negative, and a close above 2556 will be positive. The last several days of small narrow range days have set the stage for big move now. As stated yesterday, the probability of upmove is higher because the futures have been holding up above 2550. However, for any reason, if they go below 2550, then fresh selling can rapidly take the futures down to 2530-2535. Continue reading

Emini Futures Trading Analysis- 08Sep2017

spx-500-futures-daily-chart-analysis-08sep2017

The S&P500 Emini Futures are currently at 2463. The futures have been testing various support levels like 2410-2420 to 2440-2450 over the last 2 months, and they are preparing for a fresh attempt to cross 2480. Previous attempt failed and the futures fell nearly 70 points from 2488 till 2420. So the futures are taking their time in testing all support levels in order to launch a fresh attempt to cross 2480 and go towards 2500.

There is a solid resistance/ selling pressure at 2480-2483 level, and it will need a strong push to cross it. There can be no room for selling pressure around 2483 otherwise 30-40 points will be loss rapidly, and all the effort in creating longs will be wasted again. Such an effort may happen in the next 1-2 weeks.

[Bonus Trade]
Buy S&P500 Emini Futures at 2463 for Target 2483 with Stop loss 2443.

Emini Futures Trading Analysis- 12Aug2017

Hello Folks, the S&P500 Emini futures closed at 2440.50
Last week was outright bearish for the S&P500 index, for whatever reasons. We all know the market has been moving up without major correction, and it was going to come sooner or later. I was up till 2 am last night and back up again early today morning to do my market study. The market is making me uneasy after a long time. We have been long with confidence since Jan-Feb 2016, and whatever stop-loss we had along the way, was due to market whipsaws, but not due to trend change. The upside targets were always intact. However, now that seems to be changing. My upside target of 2500 was almost achieved by the S&P500 index, which made a high of 2490 (just 10 points less than 2500). The futures went till 2488, and reversed, which was a bearish sign. But the next day gave a bullish reversal, which offered support to market, and then we got a 40 point cut from 2470 to 2430 the next day, which has wiped out most of the recent long positions.

Please see this daily chart of S&P500 Index ETF (SPY)
spy-etf-chart-11aug2017

The S&P500 index is literally sitting on support line at 2440. The index has used this support line a few times in recent months to bounce back and resume the uptrend. Every time the index tests the support line, the index will gain some strength, but the support line becomes weaker. One of these times, the support line will give away, and we may get 80-100 point fall within a week. It is this possibility of a sharp fall below 2440 that is making me rethink our trading strategy for August. We wanted to be cautious in August from the start, and the setup is looking weak.

We will have to start a short trade at some point, and I am thinking what that point would be. The market won’t give second chances in a correction, as we saw this week. The short trades tend to be 3-4X faster than long trades, and therefore, its very difficult to catch them midway unless we are already in the trade.

One way to handle such a situation is to buy and hold SPY put options. We have done this in the past, and in case of any large market fall, the Put options work like short futures, at a fraction of the cost of futures.

My recommendation is to hold this put option: SPY Sep 2017 240 Put
https://finance.yahoo.com/quote/SPY170915P00240000

Expiry Date: Sep 15, 2017. Last traded price was $2.60
Contract size is 100. So each Put option contract will cost $260. Traders can hold a few contracts. This will offer good protection/hedge in this market till its expiry, which is one month away, and much of the current volatility would play out by then. If the futures have to go fall by 100 points to 2350, they may do it in the next 4 weeks.

Please note: the above put option is a just a suggestion, and the setup looks suitable to hold some put options. You may consider it a Bonus Trade.

With S&P500 Emini Futures, we will aim to close our long trade between 2450-2460 on Monday/Tuesday, and we will look for a short trade below 2440. The futures have to move above 2475 for the current bearish pattern to end. That’s why I was thinking of staying long with target of 2473, but it looks less likely now, compared to a retest of 2410-2420 level. I will mail you separately for this because my analysis is not complete yet. It is complex when the futures have dropped quickly to a support line, and probability of further correction is high. Please wait for my next mail with specific next steps. Thanks.