Perfect markets before a perfect storm – Trading the S&P500 emini futures.  Don’t buy at the top!

The S&P500 emini futures and most of the indexes have been experiencing a very calm and continuous gain for quite a while.  We are noticing that even as more bad news has been hitting the air that even better good news is coming to the rescue.  Sometimes even before the real numbers are seemingly known.

Trading on the S&P500 has been a slow and grinding process to these highs and many traders have been sidelined worrying about the correction or the retracement before a break to new highs.

S&P500 Emini futures trading Perfect Storm – Point of Control on the S&P500 emini futures contract is 1502 into this closing with next week starting off at 1498 and 1508 dependant on the after hours opening on Sunday.

The previous long term swing high was at 1460 and when price gapped up from 1420 to 1442 giving price momentum to approach this elusive resistance level, It continued to consolidate 5 trading days on decreasing volume before the breach and continuation to 1506 and 1508 resistance.  I left the Fib projection for an overbought move off the previous swing highs to the swing low in November.  Using this as a consideration the projection would be at these levels.  The last four days of trading we have had increasing volume for the test of support in the consolidated zone from 1494 to 1504 until we got the break on today’s move up from that support.  Watch as this continues testing that support and we get a move up on the dollar index.

The dollar index is ready for a bounce up which will send this market down to test the support at 1500 then 1496 The weekly point of control is 1490.

Could be a bit consolidated.  Watch your self.  False break outs, consolidation and a choppy price action on major supports.