Inside day with the bullish biasThe expectation for the E-mini S&P 500 futures contract for Friday is a session that trade inside the Thursdays range with a positive close.
MES1! trade ideas
Quarterly S&P ChartOk this is a tiny bit "tongue in cheek" but the 3 month close is poor and the Russell is acting like even worse.
AMP Futures - Enhance line charts with gradient customization.In this idea we will demonstrate how to apply the new Gradient line chart customization feature.
ES Morning UpdateThanks to a textbook failed breakdown, year 2025 has kicked off in the Green. Mentioned yesterday, a failed break of last week’s 5917 lows triggered will be a good entry... and we’re now up 66 points.
As of now: Protect gains and let the runner ride.
• Supports: 5978 and 5950 to keep 5996, 6004+ in play
• If price dips below 5950, watch for further downside.
Happy New Year for S&P???While there have been no signficant negative moving average crosses on the Daily chart (apart from being near to the 100 Day SMA again),the 4 Hours charts are showing signs of negative rotation with the 20 Ma crossing beneath the 50 MA and the 100 starting to cross below the 200 MA.
Short term, it's tempting to sell above 5950 with a stop above 5962.The prior order block level above at 5980-6116 is now important resistance and a close above it might signal that 5865 acts as an important swing low.
Conversely a daily close beneath 5900 implies a test of 5965 is on the card and even potentially augurs a hurried visit to the 200 day MA level at 5716.
My hope is to stay patient and get short at decent levels with tight stops until the market tells me otherwise.
Remember there is a long bias at play in S&P and New Year Inflows might temper the conviction of the most enthusiastic bears.
Happy New Year Everyone!
2024-01-01 - priceactiontds - daily update - sp500Good Evening and happy new year.
comment: Bears have all the arguments on their side now. Santa rally was drowned and market formed a textbook head & shoulders pattern. My lowest target in my year end special was around 5300 and the h&s target is 5400. The yearly close below 6000 was very important for the bears because now we have multiple confirmations of the sell-off and sell signals going into the new year.
current market cycle: trading range
key levels: 5800 - 6120
bull case: Bulls are in serious doubt about this bull trend. They need a strong close above 6000 to keep the market neutral between 5900 - 6100. If they manage that, we move sideways for longer. We have a triangle on the daily chart which could hold for a couple more days before we see a bigger breakout. We are also still trading above the weekly 20ema but that’s at 5930 and the next daily bear close will close below.
Invalidation is below 5860.
bear case: Bears have many arguments on their side. For bulls it’s a bad place to force the market to bottom out because they have much bigger support at 5800. Bulls have also blown the rally by printing the lower high 6107 and the head & shoulders looks too perfect for bears. Volume has also increased decently so bears have now created many good sell signals going into 2025. My rough guess for the next days is either more chop inside the triangle before the second leg down or a fast and decisive move tomorrow/Friday down to 5800 and below to test the bigger bull trend line around 5750.
Invalidation is above 6100.
short term: Neutral 5900 - 6000. Bearish below 5900 for 5800 and then 5750. Can’t see this going above 6100 but if we do, I am wrong and we likely do 6200.
medium-long term - Update from 2024-12-22: Ultimately 5200-5300 in 2025. Again, rough guess as of now and since we have not seen a strong first bear leg, these targets are the lowest I am willing to give an honest outlook about. If bears surprise and we see a huge leg down to 5500, we will go much lower for the second and third leg.
current swing trade: Nope
trade of the day: Market was closed
Sellers continue to be presentSellers continue to be present in the S&P 500 demonstrated by a week or close on Tuesday. However, we are approaching levels that would be logical to see a buyer bounce. So, be cautious on the short side of this market.
S&P500 Measured Move - ES Target 2024 Reached?That's a ...ummmhh..surprise at least.
And it's crazy.
I never thought this could happen.
But we better shall believe, that ECH - Everything Can Happen!
So, is the target reached for 2024?
Nobody knows, right?
But, I start to further close positions and take my profits in these Index and the correlating Markets.
Don't let Greed eat your Brain §8-)
As for my Christmas Lotto Ticket this year, I take a small Short Position now...LEAPs, Bear-Spread, dunno yet, but it's a Shortie that I can let sit for a couple Months.
Talk soon...
SPX bearish for two more weeksSPX looks bearish in the short term, these demand zones have a habit of being visited multiple times in the ebbs and flows of the market. Even the prior weekly demand zone had a re-test last year despite how bullish people were. A further pullback of 5% would bring is right into the most recent weekly demand zone. Funny how these play out long-term, these zones can really help with cost basis on strong fundamental assets and ETFs.
ES/SPX Morning Update This week has been all about 5987 in ES. Yesterday morning, I mentioned that buyers had to reclaim 5942 to rally back to 5987, which hit by noon. Its simple now…buyers control above; sellers control below.
As of now:
• 5966, 5950 are supports
• 5987 must reclaim for a push to 6003-6005, 6033+
• If 5950 fails, look for a sell to 5932-28, with deeper downside below
Sellers are maintaining controlSellers are maintaining control in the S&P 500. The expectation for Tuesday's price action is further movement to the downside but not a dramatic move. Be cautious on the short side as we are approaching levels that we have found buyers in the past.
2024-12-30 - priceactiontds - daily update - sp500tl;dr
sp500 e-mini futures - Bearish. Good selling today and bulls could not close above the breakout price around 5990. The close was near the open of the week and since we had a big gap down, this is bearish confirmation. Below 5900 this could very well close the year below 5860, which would be a nasty bearish reversal bar on the monthly chart and a clear sell signal going into January. Bulls need to break above the trend line and 6000 again and a close above it would be neutral.
comment: I am heavily favoring a yearly close below 5900 as of now. The selling is strong enough and bears made lower highs again. Anything below 5860 would surprise me though. We are in a clear bear channel and bulls need something above 5965 and bears a break below 5900. The open of December was near 6100 and the lower bears can close this monthly bear bar, the better.
current market cycle: trading range
key levels: 5800 - 6050
bull case: Bulls retraced 78.6% of the sell-off which was the fib retracement to the tick. Did it help? No. Very strong selling into the close again and after hours. Bulls need to fight for 6000. The only thing they have going for them is that we made a higher low. Any yearly close above 6000 would be good for them.
Invalidation is below 5860.
bear case: Bears are trading below the 1h 20ema, daily 20ema and have 2 bear trend lines going for them. They need strong follow through tomorrow and close this below 5865, which was the previous December low. We have nested bear channels on the 1h chart but also a triangle with last weeks low. Objectives for the bears tomorrow are to keep the 1h 20ema resistance and break below 5900 to test 5865.
Invalidation is above 6038.
short term: Neutral 5950 - 6000. Bearish below 5950 for 5900 and then 5865. Uber bearish below 5865.
medium-long term - Update from 2024-12-22: Ultimately 5200-5300 in 2025. Again, rough guess as of now and since we have not seen a strong first bear leg, these targets are the lowest I am willing to give an honest outlook about. If bears surprise and we see a huge leg down to 5500, we will go much lower for the second and third leg.
current swing trade: Nope
trade of the day: Selling since Globex open. The reversal from the 5918 low was very strong and trapped many late bears. Second best trade was to take it and hold until market stalled for multiple hours near 5990.
ES - intraday reversalsThe Impulse Master Indicator nailed both, the morning bottom and the afternoon top.
Read more at:
A Secular Bull Market Will Face Strong HeadwindsCME: Micro E-Mini S&P 500 Futures ( CME_MINI:MES1! )
The Year of the Dragon is quickly approaching the end. If you invested in U.S. stocks, the chances are you have a pretty good year so far. Let’s review how major U.S. stock market indices performed (data as of December 30th):
• The blue-chip Dow Jones 30 trading at 42,992 Midday today, up 12.8% in 2024. This is a back-to-back gain after a 13.7% annual return in 2023. This year, the Dow performed better than its 5-year average of 8.5%.
• The broad market index S&P 500 quoted at 5,899, up 23.7% this year, ahead of its 5-year average of 14.5% but below the 2023 gain of 24.2%.
• The Tech-heavy Nasdaq Composite closed at 19,453, up 29.6% year-to-date, which is below its 2023 gain of 43.4%, but above its 5-year average of 17.1%.
• The small-cap Russell settled at 2,212, up 9.1% YTD, below last year’s 15.1%, but above the 5-year CAGR of 6.1%.
U.S. stocks grew less spectacularly comparing to 2023, however, they still outperformed its global peers, from developed countries to emerging markets alike:
• The Nikkei 225 (Japan) gained 21.1% in 2024. However, this remarkable performance is dented when considering the 11% Yen depreciation against the dollar this year.
• The SSE (China) gained 14.8%, above its 5-year aggregate of 13.2%. Depending on when you entered the Chinese stock market, your return could vary significantly.
• The FTSE 100 and the Stoxx 50 indices were up 5.4% and 8.6% YTD, respectively. The stock performance in Europe lags the U.S. in 1-year, 3-year and 5-year terms.
• The Nifty (India) gained 9.9% this year and 68.3% total in five years. This showcases India as a growing world economy in the 21st century.
• The Ibovespa (Brazil) lost 9.4% in 2024 and gained only 3.2% over five years.
The 2025 Outlook
The new Trump administration will assume power on January 20th, and the Year of the Serpent will start on January 29th (the Lunar New Year). Judging from campaign promises and new Cabinet nominations, investors expect dramatic policy changes in the coming months and years. Heightened uncertainties will result in higher stock volatility, which increases the overall risk of investing.
With a lot still up in the air, even the Federal Reserve does not factor in policy changes in their economic forecast. Today, I will attempt a discussion on the stock market valuation through the lens of the Discounted Cash Flow (DCF).
In January, during The Leap — Paper Trading Competition by TradingView, I will publish a deep-dive analysis on the “Magnificent Seven” stocks, on how they will fare under the new administration policies, and how they will impact the S&P 500 index together.
To refresh our financial knowledge, the DCF model says that an asset’s value is the present value of its expected future cash flows.
In the numerator, Cash Flow is a function of revenue minus cost. In the denominator, the weighted average cost of capital (WACC) is applied to discount the cash flows.
Potential policy impacts on business growth (corporate revenue and profitability):
• Tailwind: The “America First” policy is bullish on U.S. businesses. It will help bring manufacturing back onshore, create new jobs and support consumer spending.
• Tailwind: Lowering corporate income tax from 21% to 15% will improve profitability.
• Headwind: Higher tariffs will raise retail prices as well as input costs for manufacturing. Higher prices will reduce sales volume for most businesses.
• Headwind: Slashing federal spending will reduce sales revenue from industries relying on government spending, including healthcare, retirement and defense spending.
Potential policy impacts on borrowing costs:
• Headwind: The recent rebound in inflation has caused the Fed to hold back on future rate cuts. Fewer cuts mean higher expected future interest rates. This is the main reason behind the 700-point plunge in the Nasdaq following the December FOMC.
• Headwind: Higher tariffs will fuel inflation. Learning from the past, the magnitude of tariffs could be large, making it impossible to find alternative products without higher costs. This will further reduce the Fed’s appetite to lower interest rates.
Taking as a whole, it is my opinion that U.S. stocks will face more headwinds than tailwinds in 2025. The structural changes in how to run the government more efficiently will be positive over the long run, but they will cause pain if you are caught in the middle. Overall, I would adopt a more defensive strategy when trading U.S. stocks.
Trade Setup with Micro E-Mini S&P 500 Futures
With heightened uncertainties, I would prefer shorter-term trading strategies based on incoming information and avoid making longer-term directional bets.
We could explore setting up a trade one week ahead of a “Big Report Date”, including the monthly CPI and nonfarm payroll reports and the FOMC meetings eight times a year. With higher volatility, investors tend to overreact to these big data. This makes short-term outsized gains more likely when you are proven correct in your view, by tapping into the leveraged investment instruments like futures.
Micro E-mini S&P 500 futures (MES) offer smaller-sized versions of CME Group’s liquid benchmark E-mini S&P 500 futures contracts. They are designed to manage exposure to the 500 U.S. large-cap stocks tracked by the S&P 500 Index, widely regarded as the best single gauge of the U.S. stock market. The Micro E-mini S&P 500 futures contract is $5 x the S&P 500 Index and has a minimum tick of 0.25 index points.
With Monday quote of 5,954, each March contract (MESH5) has a notional value of $29,770. Buying or selling one contract requires an initial margin of $1,522.
Hypothetically, if a trader wants to trade the January 3rd, 2025 Nonfarm Payroll report, he could long or short the MES contract on Monday, December 30th, 2024.
Generally speaking, solid job growth tends to point to the economy overheating. This would raise the Fed’s motivation to keep interest rates high. On the contrary, higher unemployment may prompt the Fed to lower interest rates to help out.
Theoretically, if a trader wants to trade the January 15th, 2025 CPI report, he could long or short the MES contract on or around January 8th, 2025.
Typically, lower inflation supports the Fed to bring rates down to a long-term normal level, while persistent high inflation would force the Fed to keep rates higher for longer.
Referring back to the DCF model, higher interest rates would reduce the present value of asset price, while lower rates would raise the price.
A follow-up on the MES is scheduled to publish on January 20th, 2025, at the start of the LEAP contest. With the “Magnificent Seven” accounting for 30% of S&P 500 valuation, I would apply a collective trend of these stocks to construct a trading strategy.
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Trade Idea 2024-12-30 and Review of 2024As the year comes to a close, we expect it to be a quiet week. If you haven’t already, now is an excellent time to set your trading goals for the coming year. Where will your focus be? Which markets will you trade actively? What is your risk management plan?
It is also a good time to complete a review for 2024 if you have not already! Keeping a trading journal is essential for tracking progress and learning from your mistakes.
Active trading, like other high-performance activities, requires resilience, focus, and a winning mindset, but even with these attributes, losses are a natural part of the process. Always trade with a clear plan, manage your risks effectively, and never trade with more capital than you can afford to lose.
As we wrap up the year, we are sharing a couple of the most popular charts we reviewed in 2024 and reflecting on the following questions we asked ourselves:
What has the market done?
What is it trying to do?
How good of a job is it doing?
What is likely to happen from here?
Volume profile provides key insights into market auction and interaction of buyers and sellers.
This is how we approach markets although there are many other ways of doing so.
Big Picture ES Futures:
Key Levels:
2024 mid point: 5574.50
2024 VPOC: 5441.75
2024 Value Area High: 5844.25
2024 High: 6184.50
Fib Extensions Target 1: 6388
Fib Extension Target 2: 6514.25
Fib Extension Target 3: 6590.75
Fib Extension Target 4: 6695.50
Big Picture BTC Futures:
Key Levels:
2024 High: 108,960
2024 Mid point: 77,865
2024 VPOC: 69,710
2024 Value Area High: 79,525
Key Support for Bulls: 78,000 - 76,000
Big Picture CL Futures:
Key Levels:
Composite Value Area High: 79.65
2024 Value Area High: 74.90
2024 Mid point: 72.14
2024 VPOC: 69.70
2024 Value Area Low: 66.70
Composite Value Area Low: 63.55
We await the start of the new year to further gauge short term price action, volume and ranges for the upcoming year! Happy trading from EdgeClear! We wish you all a great 2025!
Disclaimer: The views expressed are opinions and should not be interpreted as financial advice. Derivatives involve a substantial risk of loss and are not suitable for all investors.
ES/SPX Morning updatesOn Friday, sellers lost a three-day support zone at 6060, triggering a 60+ point sell. Buyers gave us a late-day short squeeze to the 6027+ target before the sell-off continued.
As of now: It’s straightforward. Bulls must reclaim 5986 to squeeze toward 6006+. Otherwise, watch for 5955 and 5942 as next downside levels.
ES - two monthly levels worked as a resistanceOn a micro 15 min chart we can see a bearish Head and Shoulders reversal pattern.
The green line is the Monthly Support drawn by my Month Opening Range indicator.
see:
Note that the green line, the monthly support, once broken started to work as a resistance for the very last push higher.
ES1! Daily/15 short E-Mini S&P 500 futures attempted a re-test of the year high into christmas eve on the daily chart. By thursday, the bulls had been washed out and a reversal was initiated. Being the price action failed it's bullish extension along the year high, I am taking the current formation as a bearish 'drop and pop', expressing conviction in this trade by shorting the 15 minute chart 'drops and pops' toward the price point ES1! should trade to on the daily chart. Gains have already been realized in the first leg of selling, price action is being monitored for the next entry granted price action holds.
a clear title that describes your idea.Please provide a meaning and detailed description of your analysis and prediction. Walk us through your thought process. Put yourself in the readers shoes and see if you would understand the context based on what you wrote. Clearly stated profit and targets and stop loss areas help clarify any trade idea.
Combined US Equities - not nice end, not expecting a great startQuick analysis of the Combimed US Equities daily chart...
A significant rebound last week put the closing back into the decision box. Thing is, it went out the other end, as expected it would, BUT ended with a doji (indecision candlestick) and came back into the box... which suggest an exit to thru the lower end. This is abou to happen over the last days of the 2024.
And IF it exceeds the last low, then it is a tell all that 2025 is not going to be bullishly exciting.
In any case, a good retracement is overdue and likely comes in 1Q2025
Technicals here show weakening MACD and a decelerating rate of VolDiv.
Let's see how bullisht the first day of 2025 and the first week of 2025 can be... not terribly optimistic IMHO.
In any case... HAPPY NEW YEAR 2025 everyone!
Stay safe and stay happy!
ES Weekly Trading Plan: Balancing Market Strategy 12/29 🚨Trading Plan: Balancing Market Strategy with Failure Scenarios 🚨
Market Context
The market is currently in a balancing phase, with defined extremes of the balance zone at 6164 (high) and 5898 (low). Our approach will focus on trading around the midpoint and targeting key levels, while remaining aware of potential failure scenarios where the market tests beyond the extremes but fails to sustain momentum.
Key Levels
Balance Zone High: 6164
Balance Zone Low: 5898
Midpoint (Pivot): 6031
🎯 Upside Targets:
6072
6108
6144
📉 Downside Targets:
5999
5964
5928
🧑💼 Strategy Overview
Objective:
Trade within the balancing market, utilizing the midpoint as a pivot for directional bias, while also preparing for failure scenarios at the balance zone extremes.
Risk Management:
Place stops just outside the balance zone extremes to avoid being caught in a breakout trap.
Execution Plan:
Follow a systematic entry and exit plan based on price action near key levels, with heightened focus on failure scenarios at the extremes.
Trade Execution Plan
Pivot Zone: 6031
If price holds above 6031:
Look for long opportunities targeting upside levels.
If price breaks and holds below 6031:
Look for short opportunities targeting downside levels.
Upside Trade Setup:
Entry:
Enter long positions near 6031 on confirmation of support (e.g., strong buying momentum, bullish candlestick patterns).
Targets:
6072 → 6108 → 6144 →
Stop Loss:
Place stops just below 5999 to protect capital.
Downside Trade Setup:
Entry:
Enter short positions near 6031 on confirmation of resistance (e.g., strong selling momentum, bearish candlestick patterns).
Targets:
5999 → 5964 → 5928 →
Stop Loss:
Place stops just above 6072 to protect capital.
⚡ Failure Scenarios
Looking Above 6164 and Failing:
Scenario:
The market breaches 6164, signaling potential breakout buyers, but quickly reverses and re-enters the balance zone.
Trade Opportunity:
Short the market on confirmation of failure (e.g., rejection candlesticks, increasing sell volume).
Targets:
6144 → 6108 → 6072 → Midpoint (6031).
Stop Loss:
Place stops just above 6164 to avoid prolonged breakout risk.
Looking Below 5898 and Failing:
Scenario:
The market breaches 5898, signaling potential breakout sellers, but quickly reverses and re-enters the balance zone.
Trade Opportunity:
Long the market on confirmation of failure (e.g., rejection candlesticks, increasing buy volume).
Targets:
5928 → 5964 → 5999 → Midpoint (6031).
Stop Loss:
Place stops just below 5898 to avoid prolonged breakout risk.
Fake Breakout from Midpoint (6031):
Scenario:
The market shows a directional breakout from 6031 but fails to sustain momentum, reversing back into balance.
Trade Opportunity:
Trade in the direction of the failed breakout, targeting the opposite side of the balance zone.
Stop Loss:
Place stops just outside the failed breakout level.
💡 Risk Management
Position Sizing:
Risk no more than 1-2% of account balance per trade. Use tight stops to minimize loss in failure scenarios.
Break-Even Adjustments:
Move stops to break-even once the first target is hit.
📈 Trade Monitoring
Order Flow Analysis:
Continuously monitor volume and order flow near extremes and the midpoint for signs of breakout or failure.
Market Context Update:
Adapt the plan if the market establishes a new range or breaks out of balance.
💰 Exit Plan
Take profits incrementally at each target.
Exit immediately if the market signals sustained breakout momentum beyond the balance zone extremes.
🔔 Stay disciplined and adapt to the price action!
#BalanceZone #MarketStrategy #RiskManagement #SPX
US Stocks Pull back SharplyStocks declined on Friday, led by technology names, but major indexes still posted a positive holiday week.
The blue-chip Dow Jones Industrial Average
shed 333.59 points, or 0.77%, to 42,992.21, falling for the first time in six sessions. The S&P 500
fell 1.11% to 5,970.84. The Nasdaq Composite
slid 1.49% to 19,722.03, as Tesla
dropped about 5% and Nvidia
fell 2%.
