Volatility in Focus: A Trader's Perspective on S&P 500 Futures1. Introduction
Volatility is a critical concept for traders in any market, and the E-mini S&P 500 Futures are no exception. Traditionally, traders have relied on tools such as the Average True Range (ATR) and Historic Volatility (HV) to measure and understand market volatility. These tools provide a snapshot of how much an asset's price fluctuates over a given period, helping traders to gauge potential risk and reward.
ATR measures market volatility by analyzing the range of price movement, often over a 14-day period. It reflects the degree of price movement but doesn’t differentiate between upward or downward volatility. Historic Volatility looks at past price movements to calculate how much the price has deviated from its average. It’s a statistical measure that gives traders a sense of how volatile the market has been in the past.
While these traditional tools are invaluable, they offer a generalized view of volatility. For traders seeking a more nuanced and actionable understanding, it's essential to distinguish between upside and downside volatility—how much and how fast the market moves up or down.
This article introduces a pragmatic, trader-focused approach to measuring volatility in the E-mini S&P 500 Futures. By analyzing daily, weekly, and monthly volatility from both the upside and downside perspectives, we aim to provide insights that can better prepare traders for the real-world dynamics of the market.
2. Methodology: Volatility Calculation from a Trader’s Perspective
In this analysis, we take a more nuanced approach by separating volatility into two distinct categories: upside volatility and downside volatility. The idea is to focus on how much the market tends to move up versus how much it moves down, providing a clearer picture of potential risks and rewards.
Volatility Calculation Method:
o Daily Volatility:
Daily upside volatility is calculated as the percentage change from the prior day's close to the next day’s high, assuming the next day’s high is higher than the prior day’s close.
Daily downside volatility is the percentage change from the prior day's close to the next day’s low, assuming the next day’s low is lower than the prior day’s close.
o Weekly Volatility:
Weekly upside volatility is determined by comparing the previous Friday’s close to the highest point during the following week, assuming the market went higher than the prior Friday’s close.
Weekly downside volatility is calculated by comparing the previous Friday’s close to the lowest point during the following week, assuming the market went lower than the prior Friday’s close.
o Monthly Volatility:
Monthly upside volatility is measured by taking the percentage change from the prior month’s close to the next month’s high, assuming prices moved higher than the prior monthly close.
Monthly downside volatility is calculated by comparing the prior month’s close to the lowest point of the following month, assuming prices moved lower than the prior monthly close.
3. Volatility Analysis
The E-mini S&P 500 Futures exhibit distinct patterns when analyzed from the perspective of upside and downside volatility. By measuring the daily/weekly/monthly fluctuations using the trader-focused approach discussed earlier, we gain valuable insights into how the market behaves on a day-to-day basis.
Key Insights:
Trend Observation: The data reveals that during periods of market distress, such as financial crises or sudden economic downturns, downside volatility tends to spike significantly. This indicates a greater propensity for the market to fall rapidly compared to its upward movements.
Implication for Traders: Understanding these patterns allows traders to anticipate the potential risks and adjust their strategies accordingly. For instance, in highly volatile environments, traders might consider tightening their stop losses or hedging their positions to protect against sudden downturns.
4. Comparative Analysis: Rolling Volatility Differences
To gain deeper insights into the behavior of the E-mini S&P 500 Futures, it’s useful to compare the rolling differences between upside and downside volatility over time.
Rolling Volatility Differences Explained:
Rolling Analysis: A rolling analysis calculates the difference between upside and downside volatility over a set period, such as 252 days for daily data (approximately one trading year), 52 weeks for weekly data, or 12 months for monthly data. This method smooths out short-term fluctuations, allowing us to see more persistent trends in how the market behaves.
Volatility Difference: The volatility difference is simply the upside volatility minus the downside volatility. A positive value suggests that upside movements were more significant during the period, while a negative value indicates stronger downside movements.
Key Insights:
Trend Observation: The rolling difference analysis reveals that downside volatility generally dominates, particularly during periods of economic uncertainty or financial crises. This confirms the common belief that markets tend to fall faster than they rise.
Implication for Traders: Traders could use rolling volatility differences to anticipate changes in market conditions. A widening gap in favor of downside volatility may signal increasing risk and the potential for further declines. Conversely, a narrowing or positive rolling difference could suggest improving market sentiment and potential opportunities for long positions.
5. Volatility Trends Over Time
Understanding the frequency and conditions under which upside or downside volatility dominates can provide traders with valuable insights into market behavior. By analyzing the percentage of days, weeks, and months where upside volatility exceeds downside volatility, we can better grasp the nature of market trends over time.
Volatility Trends Explained:
Percentage of Days with Greater Upside Volatility: This metric shows the percentage of trading days within a given year where the upside volatility was higher than the downside volatility. It highlights the frequency with which the market experienced more significant upward movements compared to downward ones on a daily basis.
Percentage of Weeks with Greater Upside Volatility: Similarly, this metric calculates the percentage of weeks in a year where the upside volatility was greater than the downside. It provides a broader perspective on market trends, capturing sustained movements within weekly timeframes.
Percentage of Months with Greater Upside Volatility: This metric reflects the percentage of months in a year where upside volatility exceeded downside volatility. It is particularly useful for identifying longer-term trends and understanding the market’s behavior over extended periods.
Key Insights:
Trend Observation: Historically, again, we can see the data shows that downside volatility tends to dominate, especially during periods of market stress. However, there are years where upside volatility has been more frequent.
Implication for Traders: Traders can use these insights to adjust their strategies based on the prevailing market conditions. In years where downside volatility is more frequent, defensive strategies or hedging might be more appropriate. Conversely, in years where upside volatility dominates, traders might consider more aggressive or trend-following strategies.
6. Key Takeaways for Traders
The analysis of the E-mini S&P 500 Futures’ volatility, broken down by daily, weekly, and monthly intervals, provides crucial insights for traders. Understanding the distinct patterns of upside and downside volatility is essential for making informed trading decisions, particularly in a market that often behaves asymmetrically.
Practical Conclusions for Traders:
Risk Management: Given the dominance of downside volatility, traders should prioritize risk management strategies. This includes using stop-loss orders, protective options, and other hedging techniques to mitigate potential losses during volatile periods.
Strategic Positioning: Traders might consider adjusting their position sizes or employing defensive strategies during periods of heightened downside volatility. Conversely, when upside volatility shows signs of strengthening, more aggressive positioning or trend-following strategies could be beneficial.
Timing Entries and Exits: Understanding the patterns of volatility can help traders better time their entries and exits. For instance, entering the market during periods of lower downside volatility or after a significant downside spike can offer better risk-reward opportunities.
Adaptability: The key to successful trading in volatile markets is adaptability. Traders should remain flexible and adjust their strategies based on the prevailing market conditions, as indicated by the volatility analysis.
By incorporating these insights into their trading approach, traders can better navigate the E-mini S&P 500 Futures market, enhancing their ability to capitalize on opportunities while managing risks effectively.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Eminis
Determining Which Equity Index Futures to Trade: ES, NQ, YM, RTYWhen it comes to trading equity index futures, traders have a variety of options, each with its own unique characteristics. The four major players in this space—E-mini S&P 500 (ES), E-mini Nasdaq-100 (NQ), E-mini Dow Jones (YM), and E-mini Russell 2000 (RTY)—offer different advantages depending on your trading goals and risk tolerance. In this article, we’ll dive deep into the contract specifications of each index, explore their volatility using the Average True Range (ATR) on a daily timeframe, and discuss how these factors influence trading strategies.
1. Contract Specifications: Understanding the Basics
Each equity index future has specific contract specifications that are crucial for traders to understand. These details affect not only how the contracts are traded but also the potential risks and rewards involved.
E-mini S&P 500 (ES):
Contract Size: $50 times the S&P 500 Index.
Tick Size: 0.25 index points, equivalent to $12.50 per contract.
Trading Hours: Nearly 24 hours with key sessions during the U.S. trading hours.
Margin Requirements: Change through time given volatility conditions and perceived risk. Currently recommended as $13,800 per contract.
E-mini Nasdaq-100 (NQ):
Contract Size: $20 times the Nasdaq-100 Index.
Tick Size: 0.25 index points, worth $5 per contract.
Trading Hours: Similar to ES, with continuous trading almost 24 hours a day.
Margin Requirements: Higher due to its volatility and the tech-heavy nature of the index. Currently recommended as $21,000 per contract.
E-mini Dow Jones (YM):
Contract Size: $5 times the Dow Jones Industrial Average Index.
Tick Size: 1 index point, equating to $5 per contract.
Trading Hours: Nearly 24-hour trading, with peak activity during U.S. market hours.
Margin Requirements: Relatively lower, making it suitable for conservative traders. Currently recommended as $9,800 per contract.
E-mini Russell 2000 (RTY):
Contract Size: $50 times the Russell 2000 Index.
Tick Size: 0.1 index points, valued at $5 per contract.
Trading Hours: Continuous trading available, with key movements during U.S. hours.
Margin Requirements: Moderate, with significant price movements due to its focus on small-cap stocks. Currently recommended as $7,200 per contract.
Understanding these specifications helps traders align their trading strategies with the right market, considering factors such as account size, risk tolerance, and market exposure.
2. Applying ATR to Assess Volatility: A Key to Risk Management
Volatility is a critical factor in futures trading as it directly impacts the potential risk and reward of any trade. The Average True Range (ATR) is a popular technical indicator that measures market volatility by calculating the average range of price movements over a specified period.
In this analysis, we apply the ATR on a daily timeframe for each of the four indices—ES, NQ, YM, and RTY—to compare their volatility levels:
E-mini S&P 500 (ES): Typically exhibits moderate volatility, offering a balanced approach between risk and reward. Ideal for traders who prefer steady market movements.
E-mini Nasdaq-100 (NQ): Known for higher volatility, driven by the tech sector's dynamic nature. Offers larger price swings, which can lead to greater profit potential but also increased risk.
E-mini Dow Jones (YM): Generally shows lower volatility, reflecting the stability of the large-cap stocks in the Dow Jones Industrial Average. Suitable for traders seeking less risky and more predictable price movements.
E-mini Russell 2000 (RTY): Exhibits considerable volatility, as it focuses on small-cap stocks. This makes it attractive for traders looking to capitalize on significant price movements within shorter time frames.
By comparing the changing ATR values, traders can gain insights into which index futures offer the best fit for their trading style—whether they seek aggressive trading opportunities in high-volatility markets like NQ and RTY or more stable conditions in ES and YM.
3. Volatility and Trading Strategy: Matching Markets to Trader Preferences
The relationship between volatility and trading strategy cannot be overstated. High volatility markets like NQ and RTY can provide traders with larger potential profits, but they also require more robust risk management techniques. Conversely, markets like ES and YM may offer lower volatility and, therefore, smaller profit margins but with reduced risk.
Here’s how traders might consider using these indices based on their ATR readings:
Aggressive Traders: Those who thrive on high-risk, high-reward scenarios might prefer NQ or RTY due to their larger price fluctuations. These traders are typically well-versed in managing rapid market movements and can exploit the volatility to achieve significant gains.
Conservative Traders: If stability and consistent returns are more important, ES and YM are likely better suited. These indices provide a more predictable trading environment, allowing for smoother trade execution and potentially fewer surprises in market behavior.
Regardless of your trading style, the key takeaway is to align your strategy with the market conditions. Understanding how each index's volatility affects your potential risk and reward is essential for long-term success in futures trading.
4. Conclusion: Making Informed Trading Decisions
Choosing the right equity index futures to trade goes beyond personal preference. It requires a thorough understanding of contract specifications, an assessment of market volatility, and how these factors align with your trading objectives. Whether you opt for the balanced approach of ES, the tech-driven dynamics of NQ, the stability of YM, or the volatility of RTY, each market presents unique opportunities and challenges.
By leveraging tools like ATR and staying informed about the specific characteristics of each index, traders can make more strategic decisions and optimize their risk-to-reward ratio.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Exploring Bullish Plays with E-minis, Micro E-minis and OptionsIntroduction
The S&P 500 futures market offers a variety of ways for traders to capitalize on bullish market conditions. This article explores several strategies using E-mini and Micro E-mini futures contracts as well as options on futures. Whether you are looking to trade outright futures contracts, create sophisticated spreads, or leverage options strategies, this guide will help you design effective bullish plays while managing your risk.
Choosing the Right Contract Size
When considering a bullish play on the S&P 500 futures, the first decision is choosing the appropriate contract size. The E-mini and Micro E-mini futures contracts offer different levels of exposure and risk.
E-mini S&P 500 Futures:
Standardized contracts linked to the S&P 500 index with a point value = $50 per point.
Suitable for traders seeking significant exposure to market movements.
Greater potential for profits but also higher risk due to larger contract size.
TradingView ticker symbol is ES1!
Margin Requirements: As of the current date, the margin requirement for E-mini S&P 500 futures is approximately $12,400 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions.
Micro E-mini S&P 500 Futures:
Contracts representing one-tenth the value of the standard E-mini S&P 500 futures.
Each point move in the Micro E-mini S&P 500 futures equals $5.
Ideal for traders who prefer lower exposure and risk.
Allows for more precise risk management and position sizing.
TradingView ticker symbol is MES1!
Margin Requirements: As of the current date, the margin requirement for Micro E-mini S&P 500 futures is approximately $1,240 per contract. Margin requirements are subject to change and may vary based on the broker and market conditions.
Choosing between E-mini and Micro E-mini futures depends on your risk tolerance, account size, and trading strategy. Smaller contracts like the Micro E-minis provide flexibility, especially for newer traders or those with smaller accounts.
Bullish Futures Strategies
Outright Futures Contracts:
Buying E-mini or Micro E-mini futures outright is a straightforward way to express a bullish view on the S&P 500. This strategy involves purchasing a futures contract in anticipation of a rise in the index.
Benefits:
Direct exposure to market movements.
Simple execution and understanding.
Ability to leverage positions due to the margin requirements.
Risks:
Potential for significant losses if the market moves against your position.
Requires substantial margin and capital.
Mark-to-market losses can trigger margin calls.
Example Trade:
Buy one E-mini S&P 500 futures contract at 5,588.00.
Target price: 5,645.00.
Stop-loss price: 5,570.00.
This trade aims to profit from a 57-point rise in the S&P 500, with a risk of a 18-point drop.
Futures Spreads:
1. Calendar Spreads: A calendar spread, also known as a time spread, involves buying (or selling) a longer-term futures contract and selling (or buying) a shorter-term futures contract with the same underlying asset. This strategy profits from the difference in price movements between the two contracts.
Benefits:
Reduced risk compared to outright futures positions.
Potential to profit from changes in the futures curve.
Risks:
Limited profit potential compared to outright positions.
Changes in contango could hurt the position.
Example Trade:
Buy a December E-mini S&P 500 futures contract.
Sell a September E-mini S&P 500 futures contract.
Target spread: Increase in the difference between the two contract prices.
In this example, the trader expects the December contract to gain more value relative to the September contract over time. The profit is made if the spread between the December and September contracts widens.
2. Butterfly Spreads: A butterfly spread involves a combination of long and short futures positions at different expiration dates. This strategy profits from minimal price movement around a central expiration date. It is constructed by buying (or selling) a futures contract, selling (or buying) two futures contracts at a nearer expiration date, and buying (or selling) another futures contract at an even nearer expiration date.
Benefits:
Reduced risk compared to outright futures positions.
Profits from stable prices around the middle expiration date.
Risks:
Limited profit potential compared to other spread strategies or outright positions.
Changes in contango could hurt the position.
Example Trade:
Buy one December E-mini S&P 500 futures contract.
Sell two September E-mini S&P 500 futures contracts.
Buy one June E-mini S&P 500 futures contract.
In this example, the trader expects the S&P 500 index to remain relatively stable.
Bullish Options Strategies
1. Long Calls: Buying call options on S&P 500 futures is a classic bullish strategy. It allows traders to benefit from upward price movements while limiting potential losses to the premium paid for the options.
Benefits:
Limited risk to the premium paid.
Potential for significant profit if the underlying futures contract price rises.
Leverage, allowing control of a large position with a relatively small investment.
Risks:
The potential loss of the entire premium if the market does not move as expected.
Time decay, where the value of the option decreases as the expiration date approaches.
Example Trade:
Buy one call option on E-mini S&P 500 futures with a strike price of 5,500, expiring in 73 days.
Target price: 5,645.00.
Stop-loss: Premium paid (e.g., 213.83 points x $50 per contract).
If the S&P 500 futures price rises above 5,500, the call option gains value, and the trader can sell it for a profit. If the price stays below 5,500, the trader loses only the premium paid.
2. Synthetic Long: Creating a synthetic long involves buying a call option and selling a put option at the same strike price and expiration. This strategy mimics owning the underlying futures contract.
Benefits:
Similar profit potential to owning the futures contract.
Flexibility in managing risk and adjusting positions.
Risks:
Potential for unlimited losses if the market moves significantly against the position.
Requires margin to sell the put option.
Example Trade:
Buy one call option on E-mini S&P 500 futures at 5,500, expiring in 73 days.
Sell one put option on E-mini S&P 500 futures at 5,500, expiring in 73 days.
Target price: 5,645.00.
The profit and loss (PnL) profile of the synthetic long position would be the same as owning the outright futures contract. If the price rises, the position gains value dollar-for-dollar with the underlying futures contract. If the price falls, the position loses value in the same manner.
3. Bullish Options Spreads: Options are incredibly versatile and adaptable, allowing traders to design a wide range of bullish spread strategies. These strategies can be tailored to specific market conditions, risk tolerances, and trading goals. Here are some popular bullish options spreads:
Vertical Call Spreads
Bull Call Spreads
Call Debit Spreads
Ratio Call Spreads
Diagonal Call Spreads
Calendar Call Spreads
Bullish Butterfly Spreads
Bullish Condor Spreads
Etc.
The following Risk Profile Graph represents a Bull Call Spread made of buying the 5,500 call and selling the 5,700 call with 73 to expiration:
For detailed explanations and examples of these and other bullish options spread strategies, please refer to the many published ideas under the "Options Blueprint Series." These resources provide in-depth analysis and step-by-step guidance.
Trading Plan
A well-defined trading plan is crucial for successful execution of any bullish strategy. Here’s a step-by-step guide to formulating your plan:
1.Select the Strategy: Choose between outright futures contracts, calendar or butterfly spreads, or options strategies based on your market outlook and risk tolerance.
2. Determine Entry and Exit Points:
Entry price: Define the price level at which you will enter the trade (breakout, UFO support, indicators convergence/divergence, etc.)
Target price: Set a realistic target based on technical analysis or market projections.
Stop-loss price: Establish a stop-loss level to manage risk and limit potential losses.
3. Position Sizing: Calculate the appropriate position size based on your account size and risk tolerance. Ensure that the position aligns with your overall portfolio strategy.
4. Risk Management: Implement risk management techniques such as using stop-loss orders, hedging, and diversifying positions to protect your capital. Risk management is vital in trading to protect your capital and ensure long-term success
Conclusion and Preview for Next Article
In this article, we've explored various bullish strategies using E-mini and Micro E-mini S&P 500 futures as well as options on futures. From outright futures contracts to sophisticated spreads and options strategies, traders have multiple tools to capitalize on bullish market conditions while managing their risk effectively.
Stay tuned for our next article, where we will delve into bearish plays using similar instruments to navigate downward market conditions.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
Echoes of the Past: Analyzing E-mini S&P Futures 2008 vs. 2024Introduction to E-mini S&P Futures
E-mini S&P Futures stand as a testament to the intricate dynamics of financial markets, capturing the essence of broader economic trends and investor sentiment. As we navigate through 2024, these futures face a situation reminiscent of the prelude to the 2008 global financial crisis. This article embarks on a journey to analyze the current market position of E-mini S&P Futures against the backdrop of October 2007, unraveling the echoes of the past through which we could have a glimpse into the potential trajectory for 2024.
Historical Parallels: 2007 vs. Today
In October 2007, E-mini S&P Futures approached the precipice of a significant market downturn, attempting to break the all-time high set in March 2000 in vain, marking the peak before the devastating 2008 crash. Fast forward to today, we find ourselves in a similar position, with the market challenging the all-time high set in January 2022. However, the context now is markedly different, with indicators and market fundamentals suggesting a more robust potential for upside than downside.
Technical Analysis of Current Market Position
A detailed technical analysis paints a vivid picture of the current market. Key resistance and support levels are scrutinized, with a particular focus on how they compare to those of 2007. Indicators such as RSI, and MACD are employed to dissect the market's momentum and volatility, offering insights into potential future movements.
Additionally, to ensure the analysis remains impartial, we're utilizing a 42-day regression channel on both prices and indicators. This sophisticated tool will discern whether there's a convergence of trends or, conversely, a divergence between price movements and indicator signals.
2007/2008 Presented a Strong Divergence
Prices and Indicator are Not Diverging in 2024
The October 2007 Echo
The situation in October 2007 serves as a stark reminder of the market's capacity for sudden and profound shifts. By analyzing the market patterns, investor behavior, and economic indicators from that period, we draw parallels and contrasts to the present day, providing a multi-dimensional view of the potential market trajectory.
Breakout Teaser in 07/08
In October 2007, the E-mini S&P Futures made a daring attempt to surge beyond the previous all-time high price levels. However, this potential breakout turned out to be a deceptive "fake-out," setting the stage for a significant downtrend that persisted until March 2009.
Consequently, as the potential breakout faltered and the E-mini S&P Futures prices began their descent, they encountered minimal resistance to the downward movement. This was primarily because there were no significant support levels in close proximity, leaving a considerable gap until the next substantial support zone was encountered at markedly lower price points.
Potential Opportunities Amidst the Bad News
Despite the ominous shadow of 2007, the current market scenario reveals opportunities. The bad news dominating headlines may indeed present favorable conditions for trading E-mini S&P Futures at more attractive prices. An objective analysis, free from the emotional weight of the past, reveals a market teeming with potential for informed traders.
Break-Out or Fake-Out this Time?
The above chart bears a striking resemblance to the scenario observed in October 2007. However, it's crucial to acknowledge the distinct differences in our current market conditions. In 2024, the convergence of the RSI and MACD with the price, as opposed to divergence, paints a notably different picture. Furthermore, as depicted in the chart below, the proximity of significant support price levels forms a robust barrier, challenging the development of a downtrend and underscoring the unique nature of the current market landscape.
Forward-Looking Insights
The analysis leads us to a series of forward-looking insights. A comparative historical approach, coupled with current technical analysis, suggests that while the market is at a critical juncture reminiscent of 2007, the outcome may not necessarily follow the same path. The article discusses potential market scenarios for E-mini S&P Futures, considering the interplay of economic reports, investor sentiment, and global events.
With this delicate balance, influenced by both past events and current market conditions, we present a comprehensive detailed trade plan which would benefit from such potential new all-time high prices being formed.
Trade plan elements for a Risk-Defined E-mini S&P Futures Opportunity:
Understanding the Instrument : E-mini S&P Futures is a futures contract with a point Value of $50 per point. Traders willing to reduce the risk of the trade can use MES (Micro ES) which would reduce the exposure by a factor of 10 times less.
Risk Management : Experienced traders prioritize risk management. Using stop-loss orders or hedging techniques is imperative to avoid undefined risk exposure.
Precision in Entries and Exits : Aligning entries and exits with relevant market price levels can help manage risk. When a price point generates a bounce, the trader stays in the trade; if a price level is violated, the disciplined action is to exit the trade promptly for a predetermined loss.
Relevant Price Levels for E-mini S&P Futures : Currently, ES1! shows relevant support levels starting 4662.50.
Proposed Trade Plan:
ENTRY: At a significant support level identified by the analysis: 4662.50.
STOP-LOSS: Set at a calculated risk level below the entry: 4481.25.
TAKE PROFIT TARGET: Aimed at an identified resistance level which in this case does not exist and therefore we are taking a Fibonacci projection: 5300.50.
This plan offers a structured approach with a clear Reward-To-Risk ratio, aiming to capitalize on potential market movements while ensuring disciplined risk management.
Navigating 2024 with Lessons from 2008
As traders look to navigate the uncertain waters of 2024, the lessons from 2008 become invaluable. The article provides a nuanced strategy framework that incorporates risk management, market timing, and scenario planning. It emphasizes the importance of vigilance, adaptability, and informed decision-making in capitalizing on potential market movements.
Conclusion
The echoes of 2008 reverberate through today's market, presenting a unique blend of challenges and opportunities for traders of E-mini S&P Futures. By analyzing the past and present, this article provides a comprehensive view of the potential market dynamics for 2024. It concludes with strategic insights and a potential opportunity for traders to leverage the lessons from the past while remaining agile and informed in the face of future uncertainties.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes, forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
The Precarious Rally Might be Stalling? Day 2S&P 500 INDEX MODEL TRADING PLANS for THU. 08/03
As we published in our earlier trading plans: "The question on everybody's mind - whether they are a bull or a bear or a bystander - is: "How long can this rally continue?". And, nobody knows - or, can know - the answer, of course. But, as long as there are doubters, the rally will still have some steam left in it - mostly feeding on short squeezes".
Earnings notwithstanding, the U.S. downgrade by the ratings agencies could have the potential to stall the bull. But, the bears should be cautious about jumping the gun, yet. There is a potential for sudden spikes up to squeeze the shorts in the near term. Might be risky to stay short while the index is above 4500.
The level of 4545-4550 is now the main resistance level, with 4500 the immediate support.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 4550, 4520, 4506, or 4491 with an 8-point trailing stop, and going short on a break below 4545, 4527, 4516, 4502, or 4487 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4537, and explicit short exits on a break above 4537 (same level). Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 12:16pm EST or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
Positional Trading Plans:
Following our published trading plans yesterday, our positional models went short on a break below 4515 (at 3:09pm, at a short entry of 4514.93) with a 16-point trailing stop and carried the short overnight with the 16-point trailing stop effective (see the overnight exposure explanation below for positional trading plans).
The short made a low at 3:55am, survived the stop till 5:10am (based on the price action in the futures markets) where it was hit, closing the position at 4526.25, for a loss of 11.32 index points.
For today, positional models indicate going short on a break below 4520 or 4510, with a hard stop at 4527 and an explicit short exit on a break above 4516.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an index-tracking instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #earnings, #usdebt, #debtdowngrade, #usdowngrade, #usdebtdowngrade, #usdebtrating
Trading Plans for MON. 07/31: Will The Precarious Rally ContinueS&P 500 INDEX MODEL TRADING PLANS for TUE. 08/01
The question on everybody's mind - whether they are a bull or a bear or a bystander - is: "How long can this rally continue?". And, nobody knows - or, can know - the answer, of course. But, as long as there are doubters, the rally will still have some steam left in it - mostly feeding on short squeezes.
Earnings this week should shed some more light on how the markets are shaping up in the wake of the sticky inflation. If they continue to appear to be on track or with a bias to the upside surprises then the next bull leg could get well entrenched. But, If the earnings show any unexpected weakness ("unexpected" is the key word there), then we might have seen an interim top.
The previously stated level of 4575-4580 is now the key support/resistance level, with the 4603-4610 range the next resistance level.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 4583, 4561, or 4537 with an 8-point trailing stop, and going short on a break below 4575, 4557, or 4527 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4568, 4548, or 4532, and explicit short exits on a break above 4532, 4552, or 4568. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:11am EST or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
Positional Trading Plans:
Our positional models continue to indicate staying out of the markets until otherwise stated.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an index-tracking instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #earnings
$spx complex corrective flat Still looks like #es_f is in consolidation mode for the foreseeable future.
SP500 Next Price Target So ClearRange is very clean.
It is very clear where the price will go.
I hope you can see this.
All ranges of this range worked sharply.
While individual investors buy the break out, you can sell it.
Have a nice one and good trading!
Last Hurrah of the Bull, or the Next Leg Up? Day 2S&P 500 INDEX MODEL TRADING PLANS for TUE. 06/06
The precarious rally of the last month has been baffling many, with the lack of the breadth of the rally while it still managed to keep going up on the run up in just a handful of big-tech names. With the major news cycles in the rear view mirror, the move up could be losing steam but if not then it could be indicative of yet another leg up that could obliterate the shorts.
If you are a bull, it may be prudent to take some profits off the table; if you a bear, caution is warranted before establishing any new shorts.
Positional Trading Models: Our positional models indicate staying flat for today. No specific positional trading plans are indicated.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for TUE. 06/06:
For today, our aggressive intraday models indicate the same trading plans as yesterday: going long on a break above 4291 or 4268 with a 9-point trailing stop, and going short on a break below 4300, 4288, 4278, or 4264 with a 9-point trailing stop.
Models indicate explicit short exits on a break above 4303 or 4281. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:01am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #debtceiling, #china, #softlanding
Markets Indecisive on the Next Leg for NowS&P 500 INDEX MODEL TRADING PLANS for FRI. 05/12
Other than the simmering regional bank crisis concerns whipsawing between the sentiments of relief and concern, there does not appear to be much for the markets to go by these days. The depressed VIX could be pointing to potential complacency in the markets that could unravel in the coming weeks to either side.
Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside - we might see a confirmation in the next few days.
Positional Trading Models: Our positional models are waiting for the tug-of-war between the bulls and the bears to show some signs of strength on either side. For now, the models are in an indeterminate mode and indicate no positional trading plans for the day.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for FRI. 05/12:
For today, our aggressive intraday models indicate going long on a break above 4160, 4144, 4130, or 4119 with a 9-point trailing stop, and going short on a break below 4137, 4128, or 4117 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4157 or 4141. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #cpi, #ppi
Post-CPI Bullish Spike Needs Confirmation from PPI TomorrowS&P 500 INDEX MODEL TRADING PLANS for WED. 05/10
As we wrote in our published Trading Plans yesterday, "The CPI and the PPI releases this week are likely going to make investors contemplating over the basics of the markets - economy, inflation, interest rates, and, maybe, freshly obsess over potential recession.". The post-CPI market action so far is underwhelming at best - looks like the markets are waiting for a confirmation from the PPI release tomorrow.
Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside - we might see a confirmation in the next few days.
However, if the PPI confirms the market action post-CPI this morning, then we might be starting another bullish leg. We need to wait for the PPI tomorrow before forming any directional bias.
Positional Trading Models: Our positional models are waiting for the PPI release tomorrow to form a positional trading bias. For now, they are in an indeterminate mode and indicate no positional trading plans for the day.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for WED. 05/10:
For today, our aggressive intraday models indicate going long on a break above 4140, 4131, 4123, 4112, or 4102 with a 9-point trailing stop, and going short on a break below 4128, 4118, 4109, or 4097 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4136. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:31am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #fomc, #fed, #fedspeak, #regionalbanks, #cpi, #ppi
SPX Model Trading Plans for THU. 04/20Markets Struggling to Gain Some Traction
Markets seem stuck in the tug-of-war between the "Inflation peaked" optimism and the "recession onset" concerns, and the earnings season so far has failed to give either the bulls or the bears any real traction. Whether the earnings ahead will help the markets gain momentum in either direction remains to be seen. Our positional models continue to be in an indeterminate state until further notice.
Positional Trading Models: Our positional models indicate no trading plans until otherwise published.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Trading Plans for THU. 04/20:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4134 with a 12-point trailing stop, and going short on a break below 4128 or 4120 with a 9-point trailing stop.
Models indicate long exit on a break below 4143. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:45am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #stocks, #futures, #inflation, #recession
SPX Model Trading Plans for WED. 03/29Choppiness to Persist Into Friday?
As we wrote in our trading plans for yesterday, Tue., 03/28: "However, our models indicate the risk for the markets to spike to the upside rather than to the downside, owing to the potential for quarter-end window dressing. We will get more clarity on this potential as we approach Friday". Our models continue to be in an indeterminate state.
Positional Trading Models: Only nimble, opportunistic trading - as opposed to positional trading - could be safe in these waters. Hence, our positional models are indicating to stay on the sidelines for yet another day.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Trading Plans for WED. 03/29:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4010, 4000, 3987, or 3972 with a 9-point trailing stop, and going short on a break below 4004, 3994, 3982, or 3967 with a 9-point trailing stop.
Models indicate no explicit long exits or short exits for today. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:45am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #newhigh, #stocks, #futures, #inflation, #powell, #interestrates, #yields, #bankfailures, #SVB, #CreditSuisse, #Deutsche
ES futures ready to tap 4,000?It was about as much of a risk-on day Tuesday could have been for US markets, with bond yields and indices rising with commodity FX.
It allowed the S&P 500 E-mini futures contract to break a 3-day losing streak and form a 3-bar bullish reversal pattern (Morning Star), so perhaps the low for the week is in place?
The 15-min chart shows prices hovering just below yesterday's high in a small bull-flag formation, although as this is out of hours trade then it's possible the market may pull back prior to another leg higher.
- The bias is bullish above the daily pivot once we get evidence of momentum moving higher
- Otherwise look for a low volatility pullback within yesterday's range and evidence of a swing low
- Today we have our eyes on the resistance zone around 4,000 which includes the daily R1 pivot, Monday's VPOC and the 4,000 handle
SPX Model Trading Plans for MON. 03/13The Banking Meltdown Rollercoaster Does NOT Bode Disaster!
The banking meltdown that started last week is now being stemmed by the Fed, with the new Fed facility extended to the banks for liquidity. Despite the failures of SVB, Signature Bank, and Silvergate, do NOT bet against the Fed's ability to stave off economic disasters in the U.S. There is no better country or financial markets that one can turn to if the U.S. markets themselves fail, whether one likes it or not.
With the situation still so fluid, it is advisable to stay on the sidelines unless you are extremely adept at navigating volatile markets.
Positional Trading Models: Our positional models are indicating to stay on the sidelines for the day.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Trading Plans for MON. 03/13:
Aggressive Intraday Models: With all the volatility - reminiscent of the dot com bubble burst and the 2008 GFC eras - in the markets due to the ongoing banking meltdown, it could be wiser to not engage in intraday aggressive trading for today, especially given the static nature of our trading plans. Nevertheless, for those of you who MUST trade (professional trader? addicted trader? whatever may be your reason), models indicate the below trading plans:
For today, our aggressive intraday models indicate going long on a break above 3896, 3881, 3865, or 3838 with a 9-point trailing stop, and going short on a break below 3890, 3878, 3859, or 3833 with a 9-point trailing stop.
Models indicate no explicit short exits or long exits for today. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:45am ET or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
#spx #spx500 #spy #sp500 #esmini #indextrading #daytrading #models #tradingplans #outlook #economy #bear #yields #fomc #fed #newhigh #stocks #futures #inflation #powell #interestrates #pce
Nasdaq Mapping Market Symmetry SetUpIn this update we review the recent price action in the emini Nasdaq futures contract and identify the next high probability trade locations and price objectives to target
DowJones Pivotal Weekly Trendline TestIn this update we review the recent price action in the emini DowJones futures contract and identify the next high probability trading opportunities and price objectives to target
Nasdaq Trades To 274 point Target, What Next?In this update we review the recent price action in the Nasdaq futures contract and identify the next high probability trading opportunity and price objectives to target
DowJones Targeting the Equality Objective & HVNIn this update we review the recent price action in the DowJones futures contract and identify the next high probability trading opportunity and price objectives to target
EminiS&P Long & Short Of ItIn this update we review the recent price action in the eminiS&P futures contract and identify the next high probability trading opportunities and price objectives to target
Nasdaq Testing Range ResistanceIn this update we review the recent price action in the Nasdaq futures contract and identify the next high probability trading opportunity and price objectives to target
DowJones Trading The Range BreakIn this update we review the recent price action in the DowJones futures contract and identify the next high probability trading opportunity and price objectives to target
EminiS&P New Upside Objective To TargetIn this update we review the recent price action in the EminiS&P futures contract and identify the next high probability trading opportunity and price objective to target
