S&P 500 E-Mini Futures

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Follow Up

In my last post, I wrote the following about the S&P 500 E-Mini Futures Options…

S&P 500 E-Mini Futures

Trading Ideas

So, what if that same client was looking for a trading idea for today?  Well, you could follow the analysis suggested on the short-term tab and try a bearish entry between 2147.50 and 2159 (shaded red on the chart), looking to target 2113.  However, one has to keep in mind that the IT and LT trends are up and also that price is currently near the dead center of the short-term trading range (2107.75 to 2172.75), so probably not the greatest trading odds here, but if you want to enter a trade then that is my suggestion as the best available option.

I don’t know about you–but if I knew a broker that could make those kinds of well-considered analysis and trading suggestions in just a few seconds after looking at any one of thousands of symbols…I would be very impressed.  So, here’s a pro tip for you aspiring brokers…use Stops and Targets to help your clients.

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Target Hit

S&P 500 E-Mini Futures

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So here we are a couple of days later and you get a follow-up call–or maybe a trade confirmation notification that says ‘the trade you placed to sell short at 2147.50 has been successfully closed on a buy to cover at the OCO target of 2113 for a profit of 34.50 per contract’.  Like I was saying before…I would be very impressed with my broker.  See how that works?  😉

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S&P 500 E-Mini Futures Options Daily Bar/Range Chart

S&P 500 E-Mini Futures Options

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The S&P 500 Futures continue to slither sideways into a contracting triangle that is defined by converging short-term support (green) and resistance (red) trend lines shown on the chart above.  The pros are likely waiting for solid intel on which way the US elections (November 8th) will break.

As I have explained here exhaustively, it’s all about 2100.25 as a hard deck for the paradigm that has been in place since 2009; so we continue to watch and wait to see which way the pros will take the market as the elections results become clearer.  A paradigm continuation suggests up to new highs to complete impulse wave 5 and then perhaps ultimately to peter out in a spectacular blossom of top spotter signals and insufferable bullishness at the apex.  A break below 2100.25 that does not immediately reverse (after a stop sweep/reversal) –or which is unable to get back above that hard deck line would be a sign that the seven-year-old paradigm has failed.  I’ll miss it when it finally reverses but my old bear suit is in the closet, pressed, and ready to go when the time comes.

Hope everyone has a great weekend.

…my .02

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S&P 500 Futures Update

I received a very good question asking about the most efficient ‘workflow’ pattern and specifically how I read and interpret the analysis from Stops and Targets.  I am going to use the symbol @ES (S&P 500 Futures) from Stops and Targets for my example here, but it works the same way for any of the other thousands of stocks, futures, ETF’s, or indexes…

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S&P Futures chart

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The Chart

The first place my eye always goes is to the chart.  There is a LOT of information that can be gleaned from the chart with just a quick glance.  For example, by looking at the candlestick bar I can see the current price (2144.75), that daily price action is so far mildly bearish (the candle body is red but very narrow), and I can also see that although the candle body is red–current price is just above yesterday’s close, which is indicated by the dashed blue line.  So, just by glancing at that candlestick bar I was able to process in a split second what would have taken comparatively much longer by looking at a typical open/high/low/close textual readout.

Once I have the current daily bar price action in mind it is time to put that into context and again the best way to do that is to continue focusing on the chart.  I look at the three primary trend lines and see that two are green and one is red.  In a fully bullish market LT (long-term) will be on the bottom, IT (intermediate) is in the middle and ST (short-term) is on top.  That can only happen after a long period of upward trending and that is what we see here–so I immediately know that the long-term trend of this symbol has been bullish.  I also know that intermediate support lies at the IT line (2100.25).  In the example above, price is currently below ST so I know that we currently have a short-term pullback in a LT/IT bullish uptrend.

Current price is between a red and green line so I also know that we have a trading range with ST bearish against IT bullish forces.  Stops and Targets calls that a BEAR 1 type of market.

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S&P 500 Futures datafeed

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Datafeed Area

Next, my eyes dart over to the datafeed area and I quickly take in the color of the price (green) and the current price (2144.75) and change from the previous close (+.50).  My mind says, gap up open that has sold back to near the previous close.  Next I glance at the timestamp (date and time) to be sure the data is current.  I saw from the chart that the range was small–but if I am interested to know the precise numbers I glance at the range.  Volume isn’t very meaningful early in the session but becomes much more important at the close–so I don’t even bother looking there yet.  So, with a quick look here I have now reinforced my visual interpretation (right-brain function) with a textual/logical representation (left-brain function).  That is total absorption of data and I am still under 3 seconds in most cases when the price action is boring, as it is here.

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screen-shot-2016-10-25-at-9-06-31-am-copy

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Trading Range/Signals

Next, my eye moves to the trading range/signals block in the top middle of the page.  Again, I am reinforcing what I already saw in the chart by confirming the rating of Bear 1.  Check.  I can see the range information also by looking at the second column and as I surmised from the chart–we have a market that is boringly-rangebound.

What I am most interested at looking for in this block is whether there has been a new signal today.  That information is shown in the third column… and so far, the answer is no.  A new signal in any timeframe will always be indicated in the third column by showing ‘TODAY’ and the text is color coded red for a bearish signal or green for bullish.  Since there is no new signal shown, I am finished analyzing this particular security.

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Summing It All Up

So, in about 5-10 seconds I have completely sized up @ES.   If I were a broker using Stops and Targets as tool to talk to a customer I would probably say something like this to my client…

ES is currently up half a point at 2144.75 but has sold off a bit after a gap up open and is near the bottom of the daily range.  It is currently in a short-term pullback in a strongly trending long-term and intermediate term bull market so the short term timeframe is in play but at the current price the risk/reward ratio is not favorable for entering a new trade.  The short-term trading range is between 2107.75 to 2172.75.

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S&P 500 Futures short term tab

I can tell the short-term timeframe is in play because there is a red down arrow indicated on the short-term tab.  So, let’s open that tab and see what it says…

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S&P 500 short term analysis

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Trading Ideas

So, what if that same client was looking for a trading idea for today?  Well, you could follow the analysis suggested on the short-term tab and suggest a bearish entry between 2147.50 and 2159 (shaded red on the chart), looking to target 2113.  However, one has to keep in mind that the IT and LT trends are up and also that price is currently near the dead center of the short-term trading range (2107.75 to 2172.75), so probably not the greatest trading odds here, but if you want to enter a trade then that is my suggestion as the best available option.

I don’t know about you–but if I knew a broker that could make those kinds of well considered analysis and trading suggestions in just a few seconds after looking at any one of thousands of symbols…I would be very impressed.  So, here’s a pro tip for you aspiring brokers…use Stops and Targets to help your clients.

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Try It Yourself

Hopefully you will find today’s post useful and informative.  Try this workflow pattern out yourself and see how quickly you can size up a random symbol that you were otherwise unfamiliar with.  Once you find one that has an interesting setup –then read ALL of the analysis information and don’t forget to consider the big picture trading setup.

For best odds of success, don’t mix trends in your longer-term trading.  If you want to be bullish, then buy stocks where all three trends are up.  If you want to trade on the short side then find stocks where all three trends are down.  

…my .02

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ES Update – Paradigm Alert!

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For seven years now I have been pointing to the weekly bar chart (shown above) as the grand ‘road map’ for visualizing how the pros have been adroitly manipulating the broad market higher by using the ES futures to drive index arbitrage.

Most of you likely don’t trade the ES futures, but the reason I focus on them here for analysis purposes is because the pros do–and they use them to force the cash market to ‘catch up’ to the futures market by the process of arbitrage.  To be succinct, when the futures are above the cash market at its open–arbitrage programs will simultaneously sell the futures and buy underlying actual cash equities until ‘equilibrium’ is attained.  When the pros drive the futures up, often on light volume–the cash market is forced to follow, and vice versa.  It’s a neat trick that uses tremendous leverage to control trillions of dollars of real equities using a derivative.  The paradox is that the tail is wagging the dog here–because the derivative (which is actually a worthless paper side bet) is being used to manipulate the real asset to which the derivataive’s value is ostensibly determined.  Neat trick, eh?

The pros have been using four-bar pivots to lock in support levels on this forced march higher since the Obama Caliphate assumed control in 2009.  If you look carefully at the chart above, I have marked all four-bar pivot lows with a green dot, and all of the four bar pivot highs with a red dot.  Think of those green dots as a series of stair steps higher–because the definition of a bullish uptrend is a series of higher highs and higher lows.  As I have pointed out many times here–each and every one of those higher lows has been significant in terms of locking in accrued profits, and also in just eight instance since 2009–as important stop sweep/reversal trade triggers.  Only twice since 2009 (see yellow highlights on the chart above) have there been occasions where a poke below the last pivot low was not immediately bought.  In those two instances, the pros set up ‘corrective’ waves 2 and 4 in a Elliot Wave style structure.

At the close Friday, a brand new 4 bar pivot low was confirmed at 2100.25!  So, following the winning strategy that has been working since 2009, it is time to snug up protective profit stops for all of you who have been playing the game alongside the pros with information from this blog and with fine-tuning and a healthy dose of analysis discipline provided by Stops and Targets.

With a backdrop of all the uncertainty and news and noise surrounding the upcoming US election…the new hard deck is now officially moved up to ES 2100.25

We will know with absolute certainty when the current paradigm, in play since 2009, finally ends–when we see a break below the last pivot low (currently at 2100.25) that is unable to recover back above that line.  

Once a breakdown that is unable to recover inevitably happens, the market could potentially enter a free fall as a long overdue major correction in the macro secular bullish uptrend unfolds–so you may wish to take this paradigm warning seriously as you prepare mentally to pocket the huge gains that have been won –if/when that support hard deck is violated.

I have stated here many times that my preferred scenario for a tradable top would be a push to new highs and eventual unanimous Stops and Targets Top Spotter signals across all the major indexes and futures that is confirmed by huge numbers of Russell 3000 spotters.  That remains my favored thesis, however, things don’t appear to be going quite according to plan for the globalists in the current election– so I am a little bit more uneasy about the market going forward from right here near a new higher pivot than I would normally be.  If the usual game continues, then we should see a rise from here that most likely does not again touch ES 2100.25 before launching.  But, these are uncertain times and any selling that might be triggered with a break below could quickly snowball into panic selling due to the unsettled emotional state of many investors…so be careful in here as we approach the election–and be prepared to protect those amazing portfolio gains, just in case.

It has been said that most big paper investment gains never get realized by the average investor.  Perhaps that is because almost all of us lack the emotional ability to very quickly change sides when a major reversal comes.  Ever heard of ‘hold and hope’ …that is a paralyzing predicament to be in, as those of us with the scars of the experience all know and well understand.  That is why you need to use an consistent, impartial, and unbiased metric such as Stops and Targets–to let you know in no uncertain terms when it is time to go.

This might be be a very good time to go through your entire portfolio and start to make notes of where you would exit existing positions in the event that this phony paradigm ends…and it will eventually end!

Associates of Julian Assange (WikiLeaks) reportedly released a set of 64-bit encryption keys today.  If true, that is a very curious development…very curious indeed.

…my .02

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ES Update

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In my last post I pointed out that there was a three-day window open for the pros to take out the stops under 2135.50 and then to possibly set a minimal short-term pivot low….

“If the pros decide they want to set a higher short-term pivot low –the minimum pullback target is 2135.50 for the next three trading days (counting today), which is one tick below the bottom of the  current VST range bottom.”

Well, here we are, exactly three days later and the pros have just taken those stops under the downside target.  So that trade setup worked out quite nicely.  😉

On the hourly bar chart above we can now fine tune the downside targets to the stop area under 2132.75 and then to the rising long-term trendline support, which is currently at the 2130 area.

The low of the day, as I type, is at 2131.75, so let’s use 2132.75 as the new intraday bull/bear line and see how this goes from here.

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screen-shot-2016-10-11-at-12-19-50-pm

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Zooming out to the daily bar/range chart…

See how the pros have used the bearish channel (shown as dashed-red descending parallel lines on the chart above) to guide this, thus far, shallow move?  The top rail is where disciplined bears have been adding to positions and trailing profit stops just above.

With the stop sweep under the old VST range bottom now achieved–that is a possible limit of this pullback before triggering something a bit more ominous to some, which would be a break of the rising long-term trendline support (rising dashed trendline just below the current low of the day).

What really matters though is the key range bottom support at 2100.25.  As I pointed out previously, if the pros close out this trading week without breaking under that line then we are going to get the next weekly 4-bar higher pivot low and that will move the paradigm hard deck stops up to that line at 2100.25.  That’s the really big prize here, so don’t get too distracted with the long-term trendline support.  The pros often like to bust those and reverse to see if they can lure in bears at the bottom of a move.

In my opinion, the smart move here is to use 2132.75 as a bull/bear line.  Intraday action going forward is bullish above and reverts back to bearish below that line.

…my .02

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ES Update

The pros are continuing on the path that I laid out in previous posts. Let’s take a quick peek at the charts in different timeframes to bring everyone up to speed…

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It is only 5 days into October but so far we are seeing an ‘inside bar’, which means the current month’s high and low are inside the previous monthly bar’s range.  Technically price action is bearish under the previous monthly close of 2160.50 –but it would take a move under 2100.25 before we would see any appreciable selling begin.  So long as the paradigm continues–the wave 5 projection is way up at 2525

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As I have explained previously, the pros have been using 4-bar pivots since 2009 to engineer this secular bull market.  After the the most recent major buy point at 1975, I pointed out that the pros always create a pullback ‘hook’ after the stop sweep/reversal (see point 8 on the chart above) squeeze is completed.  That most recent hook appeared right on schedule and dipped to 2100.25 and that is the provisional next higher four bar pivot low in the sequence–if that line can hold on any pullback through the end of next week.  If that happens–then next Friday at the close we will push the hard deck trading stops up to 2100.25.  See how that works?

The weekly chart above is the roadmap.  We will know when the paradigm has finally ended when we see a break under the last higher pivot low that does NOT recover.

The weekly bar paradigm trailing stops are currently at 1975–but we are watching to see if we can move that blue ‘hard deck’ line up to 2100.25 at the end of next week.

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Moving in now to the daily bar/range chart we can see the shallow short-term correction that is under way from the intermediate top at 2185.  The dashed red downtrend channel defines the boundaries–and the top rail of that channel is what professional bears are using for trailing profit stops.  A breakout above the top rail would likely target new highs as per the ongoing paradigm.

If the pros decide they want to set a higher short-term pivot low –the minimum pullback target is 2135.50 for the next three trading days (counting today), which is one tick below the bottom of the  current VST range bottom.

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To help fine tune the trade setups–the hourly bar chart above shows support and resistance targets.  The top of the short-term bearish channel is depicted by the descending red trendline.  That descending top rail is current at the 2163 area.

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crazykaine

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<rant/>

The VP debate was held last night and the picture above sums it up quite nicely.  I am wondering if the wacky tag team Democrat ticket of Kaine and Disabled are intentionally trying to throw this election.  Yeah, it was that bad!

</rant>

…my .02

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