Summer trading the S&P500 emini futures, support was hit today and the bounce could send the market to new highs.
As mentioned in last weeks article, the S&P500 emini futures have previously pulled back to find support in the last week of may and the first weeks of June. Today, we hit the support of 2068.75 in the overnight session and have bounced past the Point of Control at 2081 where the buyers are moved back in to control.
In a recent talk with day traders in Newport Beach. “Trade what you see, remember this is a widely held market and every time there has been a pullback or minor correction, the crazies will come out saying the sky is falling. The sky will fall when we have a 10% or more correction. Until then play the direction of the market. Trading is about being nimble.” Joel Wissing
This pattern where we have a double top or head and shoulders pattern gives us a small pullback or minor correction (less than 5%) has proven to be a continuation pattern in this widely held market.
Summer trading plan on a daily chart – major support has held.
The S&P500 reversal off of support at 2067.25 where sellers capitulated and buyers moved in is a key area of support. If you notice the buyers moved in and brought price above the 50MA at 2097 showing strength in this move up. This means the short term bullish trend is still in tact.
We have entered the next price projection zone (pinkish box) and are looking for it to move up, consolidate, and then break through the top either in the last quarter of the year of before the first week in August when we normally get a minor correction.
Downside projection this week was for the 2067.50 area, and the market is not showing signs of reversing off of today’s bullish move. If there is an outlier (read this from December 2014) that causes sellers to leave their widely held positions the next area to be tested will be 1960 for a full correction where we have an open gap.
Warning: Summer time trading can have very low volume and quick volatile movements. Always manage your risk first and don’t trade unless you know what you are doing. Only you can be responsible for your income, wealth and freedom!
Weekly to Daily Summer Trading Plan June 2015
“Traders use a trading plan to set their trades, risk management and execution with the nimbleness of trading the direction of the market.” Joel Wissing Money Maker Edge™ Trading Course.
Weekly to Daily to shape your perspective of the market. Sequencing is one of the most important steps for a trader to learn. How one sets up their trade plan is how you create your opportunities in the market.
The weekly chart is very consolidated at the top of the market where it has been hovering trying to make it’s way to new highs. 2074 the previous swing high on a move up is the new support on this move, as noted by the red line.
The sellers had a slight uptick in volume coming close to the average monthly volume of 5259k. An increase over the previous month. Still watching as the volume spikes are decreasing.
The Range is very small at 29.75 points for May. This type of small range occurs normally before we have some volatility and a break out in a market. Last years summer also started with this type of small range and then broke out in August. We might see the same unless an outlier pops on to the scene. Greece exit, could be a big mover of the markets, or a second tier bank failure for non payments of debt. Remember in a widely held market supported by quantitative easing we will see these periods of consolidation, low range days, weeks and months and then a small correction which acts like a spring to bring in the volatility to break through new highs. Here is the article about some of the pressure on the 2015 markets.
Comparing 2013 – 2014 weekly charts for Summer Trading 2015
Comparing the summer price volatility, range and volume to get an idea of price action for Summer 2015 trading. Year on year the average volume and the range has decreased from 2013 to 2014. you can see this on the first histogram on the chart. Although the change was less in 2014 than 13 we could see the same if no outliers move this market.
The range also dipped significantly during this period with a spike into August. 2014 summer trading range was much tighter than 2013 on less volume. The first week of August seems to bring in a rush of volume and an increase in the range, as you can see in the dip from August lasting 2-4 weeks from both summer sessions.
Again, during the 2014 summer we were in full swing quantitative easing so the market levitated it’s way up. QE is the fashion and we could see it enter in other countries too. Don’t forget also about the Greeks not making payments and asking for extensions. It could put pressure on the euro, boosting the Dollar and extending foreign demand. Where this will take the market, no one knows as usually stocks and the dollar index has a reverse correlation, but has acted the opposite in recent months.
Trade what you see, do your own analysis, and educate your self. No one can be responsible for your trading except for you. Be nimble, and always manage your risk first.
Corona, Ca weekly trading plan SP500 emini futures on a re-tracement and low volume inside day.
Trading plan for the S&P500 emini futures. Price has moved into the next Price projection block from 2090 to 2203. The sellers moved in on Tuesday testing the support and almost closing the gap which is laying at 2091, very close to the 50MA, which could be added support.
The seller volume spiked and moved up to 1.54 million contracts traded showing some volatility with the buyers coming back in at support keeping the market above 2100. The market was closed in the US on Monday and Tuesday when the market opened we had sellers committing to this small move down. Wednesday price action on the open had a small test down and then the buyers moved in to bring the market up 17 points. If the market closes above 2123 today we could have a powerful buy pattern as the buyers would have engulfed yesterdays price action.
The price projection to 2140, then to 2165 is still open. We will see where buyers stand going into Friday’s session to see if there is room for new highs.
Remember this is a widely held supported market. The US is not in quantitative easing but other countries are and with institutional buy backs at an all time high it seems this bull market still has direction. A 20 to 40 point pull back is not the signal to the end. A correction, which is normally assumed to be 10% correction in price would put us at support above 1800 which looks like the line in the sand for control in this market. This market is very risky and only use risk capital to trade it. Do not trade unless you know what you are doing. When corrections in the market occur, they occur quickly and Market Makers, take the profit out of the market, and normally that means any retail traders.
Having a written trading plan is helpful to be able to analyze your work. If you don’t understand how you analyze and look at the market, you will not experience improvements in your risk management and your ability capitalize on market price action. You don’t have to take every trade, there will always be another trade.