S&P 500 Futures Update

 

The screen capture above is taken from Stops and Targets and shows the Summary tab for the E-Mini S&P 500 Futures Option, which is the same symbol that is shown in the next chart that follows.  To help with orientation, I have drawn an orange rectangle around the range envelopes section.  The range envelopes correlates exactly with the chart below…

 

 

(click image to enlarge)

 

The chart above shows the S&P 500 Futures daily candlestick bars dating back to Election Day in November of 2016.

I have overlaid range envelopes for the three timeframes shown by Stops and Targets:

1) solid lines show the long-term
2) dashed lines show intermediate-term
3) dotted lines show the short-term timeframes

 

I have also drawn in three shaded areas on the chart above…

There have been three significant (long-term and intermediate-term) buying opportunities since November of 2016.  That’s right… just three!

Those were perfect When to Buy opportunities…

-The green-shaded area shows the last long-term buy (right after the 2016 Election).

-The two yellow-shaded areas show the last two intermediate buying opportunities (April and August 2017).

In a previous post I talked about looking for the buy ‘notches’ in the envelopes.  You can see them very clearly on the chart above.  That is where a significant pullback retreats to the lower rail, takes the stops underneath, and then rallies.

 

The last long-term buy was on Election Day.  Take a look at the Stops and Targets screen capture of the long-term analysis for the S&P 500 Futures:

See the trend change there on November 7, 2016?

 

 

Next take a look at the intermediate-term analysis tab…

See the last trend change on August 22nd (which correlates with the green buy arrow on the first chart)?

 

 

And just for fun, let’s look at the short-term analysis tab to see how it did…

 

Stops and Targets was dead on for the trend change again…and each touch of short-term support has been a buy since.

 

 

Range envelopes are a clever way of determining when and where to buy…and also when and where to sell a position.  (In a bearish market that could be restated to say when and where to sell short and also when and where to buy to cover).

Take the S&P 500 example above as an example.  On Election Night there was a huge futures slam down.  That was likely the pros taking the stops and scaring traders at the very moment when they should have been buying hand over fist.  Not to worry though, for those who missed the bottom–the first pullback to short-term support was a perfect entry and was never touched again on a pullback.  Since November of 2016, the bottom of the long-term range envelope has not been touched even once–as it has locked in trailing stop profits from 2016.25 to the current long-term range envelope stop price of 2441 (December contract pricing)!

For intermediate traders there have been two pullback opportunities to buy since the November 2016 bottom spotter signal.  Neither entry has been touched by a pullback since.

The range envelope chart holds a LOT of very useful information for those who are willing to peruse it carefully.  Put that trending/range trading understanding together with Stops and Targets’ automated analysis and the current setup becomes crystal clear…

To my eye this is a powerfully-trending market and there is obviously nothing bearish about a market that has broken out to the upside of the range envelopes in all three timeframes.

When a pullback eventually starts, the first thing price has to do is cross back under the top rail of the range envelope.  Counter-trend traders can then look to sell the first counter-trend sell signals in Stops and Targets if they are feeling particularly daring.

Next step in a pullback is a test of the lower channel rail.  In a powerful trend it often bounces there (see the range envelope chart above).

I won’t even consider getting bearish, however, until price closes underneath the lower range envelope rail in any timeframe.

This has been a very powerful bull market, which makes sense (finally) due to the great economic news and renewed optimism.

I will be watching the color-coded signals on the range envelopes at Stops and Targets for the next clues.

…my .02

 

 

S&P 500 Futures Update

Stops and Targets - S&P 500 Futures
Stops and Targets – S&P 500 Futures

 

 

The bottom of the short-term range envelope for the S&P 500 Futures is being tested this morning with a stop run under 2563.25.  It’s been a while since that happened (the last occurrence was in August) so this could be potentially noteworthy, but only if the short-term bearish breakout holds.  If so, the next target lower would be the bottom of the intermediate range at 2451.50.

 

 

Weekly Bars
Weekly Bars

 

The chart above shows the Weekly Bar Paradigm we have been following here since the 2009 bottom.  The last stop sweep/reversal in that ongoing paradigm occurred on election night last November at point number 9.  The most recent four-bar higher pivot low was set at 2414 at the last short-term pullback to the intermediate range bottom–and the market has been on a tear since that last intermediate support buy.

What is really cool about the new range envelopes indicator in Stops and Targets is that you can see in real-time exactly where price would have to go to set up a new higher pivot in the weekly bar paradigm…

 

Stops and Targets - @ES
Stops and Targets – @ES

 

The screen capture above highlights the intermediate range envelope bottom, which is the minimum target to potentially set a new higher four-bar pivot low on the weekly bar paradigm chart.  I have overlaid that same range on the weekly bar chart above to show how it all works together.

 

 

S&P Futures - Range Envelopes
S&P Futures – Range Envelopes

 

So, let’s add one more chart to help visualize what is happening with the range envelopes.  I have drawn in all three range envelopes on the daily bar chart above.  Those envelope boundaries are exactly the same as the ‘range envelopes’ indicator at Stops and Targets for the S&P 500 Futures Options.  A break under the short-term range bottom, if it holds, would next target the intermediate range bottom at 2541.50.  That intermediate range bottom (dashed green lines) has been an almost perfect broad market buy point after stops are swept underneath (see the ‘notches at March and August).

So that’s the deal here… the first order of business for the pros is a stop sweep under the short-term range bottom, which is currently underway.  Next we watch to see if that is it and a short-term bounce emerges on a move back over the short-term range bottom–or if the pros ultimately decide to head down one floor lower to poke the stops under the intermediate range envelope bottom.

…my .02  😎

 

 

 

 

Range Envelopes Indicator

Stops and Targets S&P 500 Futures
Stops and Targets S&P 500 Futures

In my last post I pointed out the new Range Envelopes Indicator, which now sits at the top center of every analysis page in Stops and Targets.  The range indicator is a great analysis tool all by itself but is now fully integrated with the stop/reverse lines in all three timeframes.  That is a big deal from an enhanced strategy perspective because it makes Stops and Targets far more nimble as it pertains to locking in profits–and that will be important when this very extended market starts to correct.

In a fully trending bull market the stop/reverse line follows the bottom of the range channel and that’s the case in the S&P 500 Futures example shown above.  Note that the stop reverse lines in the summary tab are identical to the range envelope bottoms.  For a complete explanation of what the arrow indicators next to the range envelope numbers mean and how the color-coding works be sure to click on the    symbol located just to the right of the ‘range envelopes’ table header.

After you have read the User Guide entry to get a solid foundation on how the Range Envelopes Indicator works then come back to this post and let’s take a real-time look at a random symbol to see how the analysis all comes together…

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Stops and Targets symbol: GD
Stops and Targets symbol: GD

click image to enlarge

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The screen capture for General Dynamics (GD) above is live as I am composing this post.  Let’s take a close look at the Range Envelopes Indicator to help put together the analysis story for this stock…

Start by looking at the ‘last range signal‘ column and look for the oldest date there.  That was 06-Oct-17 in the long-term timeframe row.  Now look at the color-coded range next to that date and see that the long-term range high at 214.81 is colored dark red.  Then find the next oldest date, which in this case is 02-Nov-17 for both the intermediate and short-term timeframe.  Now look at the color-coding for those signals to see that 200.54 on the range low side is colored dark green.  So, with a quick glance I now know that a range envelopes pullback alert was generated on 06-Oct-17 and that pullback went all the way to intermediate range support where a counter-trend buy alert was generated yesterday.

Next we take a look at the arrow indicators to the left of the range envelope numbers.  In the example above a green arrow  up tells us that the long-term is trending bullish.  Note that the stop/reverse line is equal to the range envelope low.  Next to the intermediate timeframe is a sideways green arrow ↔, which means the intermediate timeframe is currently rangebound and not trending–but has a bullish bias above the stop/reverse line, which does NOT equal the range bottom because price slightly overshot the intermediate stop/reverse line at 204.02 down to 200.54, which expanded the intermediate range lower.  Finally, take a look at the red down arrow next to the short-term timeframe.  That indicates that the short-term timeframe is trending bearish.  Note here that the top of the short-term range envelope is equal to the short-term stop/reverse line at 208.50.  See how that works?  That envelope will continue to push the trailing stops lower until it eventually gets crossed over to the upside, which will be a short-term buy (to either cover or to go long).

So, now let’s put the range envelope information together with the rest of Stops and Targets’ analysis…

Notice that there was a Top Spotter signal at the Range Envelope pullback alert.  Also notice that pullback went right to the intermediate stop/reverse line target and is now bouncing there.  Also notice that the intermediate timeframe tab is shown as the timeframe ‘in play’.  If you open that tab it will show that GD is currently inside of the ideal entry zone, where bears cover with nice profits and bulls can consider a new entry long.

There is no guarantee that GD will put in an intermediate bottom here, but so far it is doing exactly what Stops and Targets analysis showed was the highest probability from the start of the pullback. Now we watch to see who comes out on top here at the battle around intermediate support.  If the bears end up winning then we can assume that the next target lower would be rising long-term support.  If the bulls get a new foothold here, then next target higher from the counter-trend buy at 200.54 would be falling short-term resistance, which is currently at 208.50.  Pretty cool, eh.

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Now that we have looked at a more challenging analysis (GD example), take another look at the first screen capture above for the S&P 500 Futures.  My take is that it’s all good above 2555.50, but those range bottoms are starting to squeeze in tightly as a result of the recent sideways-up action.  This might be a very good time to look through your portfolio and consider using the Range Envelope Indicator to reevaluate your protective strategies.  If you need some incentive for what can go wrong when the rug gets pulled on a former high-flier–have a quick peek at Tesla (TSLA) for inspiration and motivation.

…my .02

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