Emini Futures Trading 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- Performance Summary Aug2017

Hello Folks, here is the Performance Summary for Aug 2017. We usually don’t publish trade wise details but August 2017 was particularly unique in how the trading results were different for two different trading styles, so we wanted to share them as an example, which can help all traders learn from our experience, and become better traders.

We have two types of trades.
(a) General Trades – suitable for all traders including those with just 1-2 contracts, and we measure our monthly performance on these trades. Only one trade is on at a give time.
(b) Optional/Tactical Trades Рmeant for larger traders with 5-10 or more contracts who can buy/sell 1-2 contracts at multiple market levels and exit them with 10-15 points gain. Multiple trades can be on at a give time. These are less reliable set ups, so the chances of getting hit with 10 point stop loss is 50-50 in many cases,  but we have learned from experience that such trades can be profitable in a volatile market and also in a market that is reversing after testing supports. Continue reading

Emini Futures Trading Update- 09Dec2016

Hello Folks, the S&P500 Emini futures are currently at 2254. The futures have moved from low of 1980 to 2250 this week – that’s 70 points in a week, a very good upmove indeed!

Different traders should have been able to capture different number of points based on the trading strategy recommended to them, but everybody should have made some profit in this upmove.

For example, Small traders with 1-2 contracts were asked to buy the futures at 2234 for target 2247 with stop 2226, and that trade completed within 24 hours, giving 13 points gain. Large traders with 5-10 contracts should have started long positions automatically above 2200 for target 2234 with 2180 as Stop Loss, getting at least 30-35 points gain per contract between 2200 and 2247.

In fact, a similar long trade was suggested as a Bonus Trade on Nov 22, 2016 and hence available to all our website visitors for free. Please see the previous post titled: S&P500 Emini Futures Hit 2200 Today!
Nov 22, 2016 Bonus Trade: Traders can remain long above 2200 for target 2220-2230 and 2190 as stop loss.

What happens next? After 70 point non-stop upmove, there can be some pause or profit booking. The Technical target for this upmove is 2260, which is just 6 points away from current price of 2254. For us, there is no new trade currently. There is a sell signal on the hourly charts with potential target of 2232, which could come next week after the US Fed Meeting updates on Interest Rate policy, when markets will try to adjust to the news and volatility can come back. So we will wait and watch for the next opportunity.Thanks.

Bonus Trade: Buy Emini Futures for 40-50 points upside

Bonus Trade update 06-Jan-2016: Please note the following.
If 1980 stop is hit, then buy back your futures when 1985 is crossed on the upside, with Stop at 1980 once again. In any case, you must have futures long above 1993 (i.e, above 2000 on S&P500 index)

Date: 04-Jan-2015
Hello Folks, the buy signal is visible now. The futures are at 1993 currently. Here is our bonus trade of Jan 2016, for all regular visitors of our website.
Bonus Trade#1: Jan 2016
Buy at: 1993
Target: 2043
Stop: 1980
Traders can also take profit at 2013 and 2023, so that they can buy back again at lower levels, within the above trading range. The S&P500 index and futures have recovered very nicely from day lows, and are showing buying strength. The and risk-reward for a long trade is favorable at current levels, as good as it can get. Thanks.

S&P500 needs to close above 2055 for upmove

Lots of whipsaws have been taking place in the S&P500 (SPX). There is enough fear on the trading floor thinking “what if” the US Fed begins to sound more hawkish than ever before in the context of interest rate hike. However, our view is that US Fed will be “patient” in any interest rate hike. The current market volatility of gap ups and gap downs is to be expected till the Fed’s notes are in the open. Technically, the S&P500 (SPX) needs to stay and close above 2055 for upmove to play out with a target of 2150, a new lifetime high. This will have to coincide with a dovish Fed stance.


#ratehike  #usfed #dowjones #nasdaq