Tag Archives: SP500 Resistance Levels

Emini Futures Trading Analysis- 05Mar2018

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spx500-futures-daily-chart-analysis-2681-05mar2018

The futures are on the defensive at 2681, being below 20 day SMA, but they have the support of a good defense done at 2650 level just 2 days back. So the current move at 2670-2680 maybe seen as support level testing. The sharp cut will come below 2650, so all long positions should have 2650 as the Stop loss. Long positions can be maintained above 2650 for target 2730. A reliable long trade will come above 2710.

[Bonus Trade] Buy S&P500 Emini Futures at 2680 for Target 2700 with Stop loss 2660.
That’s 20 points gain with 20 point stop loss.

Emini Futures Trading Report- 08Feb2018

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spx500-futures-hourly-chart-analysis-2597-08feb2018

Hello Folks, the S&P500 Emini futures at 2597.25
Today’s Range: 2577.75 – 2686.50

The futures did not reach 2660 after hitting our stop at 2650 in the
morning, though they crossed 2650 a couple of times, and then went down to
2600 after 2650 level failed. Therefore, our 2660 limit buy order did not
execute, and our futures long position did not re-establish today.
Currently we are on the sidelines, and will get back on board at 2660.
The upside targets are 2750, 2780, 2800 and they may come by end Feb.

Market Notes:

1. We have taken stop losses this month, and we have to recover them, and
we will do it. This is not the first time the market is falling, and we
have come out successfully from similar situation in Jan-Feb 2016. The
corrections of 2017 were minor compared to this one in Feb 2018.

2. There were multiple reasons for our choice of 2650 stop. It was a
support in that past, from which the rally took off. And on the hourly
chart, there is a head and shoulder formation, with neck line at 2650, so
below 2650, a quick fall was visible, which played out today.

3. It maybe difficult to believe looking today’s fall, but my analysis is
that the fall is over, and today was a follow up test of support levels,
to ensure all lower levels get tested in one shot. The same could have
been done at 2650, but the futures wanted to test lower like 2580. The
futures might fall further till 2550 briefly and bounce back from there.
Few months back, 2580 was a strong resistance and then it became a strong
support. I am confident 2580 will hold, and futures will bounce back up.

4. The S&P500 is falling more on lack of buyers than on selling pressure.
I believe the large funds managers are busy deciding at what level they
want to buy. This market is still a buy on dips market, the current fall
is setting the stage for next rally.

5. Similar falls of this type in the previous 5 years have taken 3-5 weeks
to build the base for the next upmove. It doesn’t look like the futures
will close above 2700 this week. Therefore, new highs of 2900+ may come
only in March or April, because it will take the futures 2-3 weeks to
build the base before moving up again. However, 2750 and 2800 are still
our targets for end Feb 2018.

6. There has been record high leverage in the market due to less
volatility and relatively good gains in year 2017. Some of those leveraged
positions will get cut in this fall, which will make the market stronger.

7. A couple of traders/investors asked me if this was a rewind of 2008
fall, which started in Jan 2018, and went on crushing prices lower till
year end. My analysis is that we are not at all in 2008 kind of scenario,
which came after 4-5 years of economic growth worldwide, and recession
data points were already visible on the dashboard. We don’t have such a
condition today, and global economic growth is just starting to picking
up, still weak in many places. We can expect new highs in S&P500 this
year, in the coming weeks and months. Thanks.

Emini Futures Trading Analysis- 29Dec2017

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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.

Emini Futures Trading Update- 07Nov2017

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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

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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 →