Tag Archives: indices

Last week’s (January 10th, 2013) Trading Plan for the S&P500 (English Language)

Hello traders,

I am sharing the trading plan for the S&P500 I have sent last week, on January the 10th, to my newsletter subscribers in the last mid-week update (see an example here) . I will update this plan today with what I expect in the S&P500 going forward using the Program and Algorithmic Trading rules found in my Trading Method.

‘The analysis for the S&P500 e-mini futures contract is the same as last week. S&P500 price held the 1390 level and is still headed into the 1472 target level. Based on the lateral price action of last week the Scenario 1 (see picture below). As it cab be seen from the below picture at the moment this contract is moving according to the first scenario which, as I indicated last week, was the more probable outcome. Although mostly lateral price as an upward bias and is continuing higher into the 1472 target. After that it could start a correction lower into the next support level in the 1427 area. Then price could then resume its move higher into the 1513 target.

Trading plan scenarios for the S&P500 index moving forward, January 10th, 2013

Trading plan scenarios for the S&P500 index moving forward, January 10th, 2013

Clearly scenario 1 above played out last week, trading 1471.50 very close to that 1472 area mentioned in the setup.

I send a free Newsletter on Sundays and mid-week updates on Wednesdays along with other information. This week I will send the mid-week update on Thursday (tonight) and you are still in time to subscribe (see what I am going to share tonight). The newsletter typically includes: a weekly review for the Euro-Dollar cross, my FibStalker View on Currencies focusing on Forex pairs, articles on my trading method, market commentaries and HFT/Program Trading. Please, register here to receive the free weekly newsletter.

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Thank you in advance for subscribing should you decide to do so. Lots of other people are doing the same.

Should you decide to operate based on this information you are invited to do your own due diligence, consult a registered trading professional, as well as, understand the risks involved. This information is for educational purpose only. Please read the Disclaimer and accept all involved risks.

Have a great evening.

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S&P500 E-mini (ES) Analysis & Potential Scenarios, November 12th 2012 (English Language)

Good morning,

hereunder a video-analysis for the S&P 500 E-mini futures (ES):

In the last few weeks I have contemplated the possibility of a crash of the US stock indices and I have also published an article titled “Will the US stock indices collapse?“, in which I report on the possibility of the S&P500 reaching 565 in 2014 and on a potential divergence between the Euro forex cross and the S&P500.

In the above video analysis I show the potential for Program Trading to push S&P500 price down in the coming weeks. The sequence of measured moves on the weekly chart is clear and the next support area in this timeframe is located down at 1130. That level corresponds to the previous lows in March 2009 and May-July 2011 when the FED clearly intervened in the stocks market, saving it from a crash or, at least, much lower prices with QE1, QE2 and Operation Twist.

This year, quite strangely, the FED initiated QE3 at highs. Okay, it is open-ended, but still why at highs? In fact, it looks like this year QE3 has been engineered in a way that seems not to be able to protect stocks from a free fall.

I identified a few important price levels in the S&P500 e-mini that we will need to monitor closely. First of all it is important to notice that the 1358 area did not trade, just yet (price stopped at 1363). The 1358 area is an important support area but as of now the S&P500 is still in a free fall. There are two areas of resistance above current price. The first one is in the 1386 area and it is only visible on the 4-hour chart. This is an extension short setup having first target at 1351 and second target at 1332. Should price react at the 1386 level there is a serious possibility for it to break the 1332 level which would invalidate the 1358 support area and, almost certainly, decree a test of the 1130 area.

A second area of resistance is located in the 1398 area, up to the 1406 level. If price gets to this area and starts moving lower again before exceeding 1406 we could see the first target at 1347 be touched before a sensible reaction takes place, but prices could keep moving lower into the 1320 area, thus again below 1332, with the same implications indicated before. On the other hand, should price climb above the 1406 area the sequence of measured moves lower on the daily chart would be interrupted and we could see a resumed move higher, as some analysts are expecting. In this case we would put aside the 808 points scenario.

This would not mean that we could not see lower prices into the 1358 or even 1347 level but, eventually, price would turn up and the S&P500 could print new highs in 2013. Therefore two scenarios are still in place and they are:

1) S&P500 e-mini keeps moving lower, breaks the 1330 area and reaches the 1130, from there it bounces or continues lower into the 600 area.

2) S&P500 e-mini climbs above 1406, then prints a higher low at 1384 or a lower low in the 1347-1358 area and resumes the move higher printing new highs in 2013

Likewise in the Euro forex cross, at this moment we need to have patience and let S&P500 price show the way. Tomorrow I will send a Trading Plan for the S&P500 (see an example here for the Euro) in my mid-week update, thus enabling Newsletter subscribers to participate or at least be informed about the the next move in the stock indices.

If you want to have access to trading plans and watch weekly video reviews as soon as possible, as well as, receive special mid-week assessments (like the one I have send out on November the 7th and I am going to publish later on the Blog), plans and setups for the Euro-Dollar cross (before they happen), please subscribe my newsletter. It’s free and you get additional content, market commentaries, setups, e-books, articles on HFT and program trading, learning material and video-analysis that I don’t make available on my blog.

Subscribe my free newsletter to get ideas on setups and learn how I do it.

Thank you for subscribing should you decide to do so. Lots of other people are doing the same.

If you intend using this information for your trading please do your own diligence, find the advice of a trading professional and trade at your own responsibility. The information provided is for educational purpose only. Please read the Disclaimer and accept all the risks. Thank you.

Have a good day

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Filed under English language, Euro FX analysis and trade setups videos

Article: Will the US stock indices collapse? (English Language)

The below article appeared in my Newsletter I sent out to subscribers last week (see below how to subscribe for free):

‘As I noticed in last week’s article focusing on the Dollar Index  there are different opinions in the market at this stage, and it is often like this. There is definitely hope that the QE3 started by the US FED will turn the market higher. However last Friday’s price response to the ‘too-good-to-believe’ job numbers in America showed resumed selling. While there are groups of market participants who believe QE3 will save the market, other professionals’ behavior shows that there is a run to safety, i.e. buying 30-year bonds and selling futures on the S&P500 to hedge existing long only positions (clearly visible last Friday soon after the news were out). What looks odd is the direction of the Euro. The Euro is in a corrective move lower into the next level of support (1.2820 or 1.2630) from where the next intermediate leg higher should start. So we need a divergence between the Euro and the S&P500 if the Euro has to continue higher while the US stock indices keep moving lower, along with the Dollar Index (typically the US stock markets would move opposite to the Dollar Index).

But we already had divergences in the past between the Euro and the S&P500, usually moving in lock-step, so I don’t see why this could not happen again this year. And typically we witnessed the beginning of such divergences in this period of the year, the month of November. I am not sure if such divergence will take place again this year. What I know is that we have an intermediate long price setup for the Euro and the possibility of a divergence. If the divergence takes place we should get the following:

  • Dollar Index moving downwards (after it completed the current cycle higher)
  • S&P500 (and world stock indices) moving downwards along with the Dollar Index (and not upwards as it would normally be when the S&P500 goes down, this would be the effect of divergence)
  • Euro-Dollar cross moving upwards (in line with the indications of my trading method)
"S&P500 target at 565" - source: www.zerohedge.com (eminiaddict.com)

S&P500 target at 565” – source: http://www.zerohedge.com (eminiaddict.com)

(click to enlarge)

In this scenario the Euro-Dollar would move opposite to the Dollar Index anyway. One important difference with the past is that this time QE3 has been unleashed near or at market tops. While, in fact, the past QEs were introduced when the stock market was falling: it looks like this year QE3 has been engineered in a way that seems not to be able to protect from a free fall. Some authors and analysts are quite extreme with regards to an anticipated, dire intermediate move in the S&P500. In the above picture you can see a projection of a financial collapse which would bring S&P500 down to 565, to the bottom of the channel.

Of course we don’t know what price will do but the long intermediate setup the Euro is approaching and the divergence between the Euro and US stock indices we witnessed in the last 4 years around November-December seems to support a move lower in the indices. Maybe this move will be limited to the 1160 area of the S&P500, but it is also possible that price will keep moving lower (as showed in the picture above). After all world economy is all but healthy still in the midst a 4-year crisis, measures from central banks have not been effective and stock prices are at highs. Moreover price structure analysis in the S&p500 is showing continued selling. We will see what price action will bring to us.’

I accompanied the above article with a video reviews of the Euro-Dollar FX futures and the Dollar Index using my analysis method. I send my free Newsletter on Sundays along with other information, typically including: a weekly review for the Euro-Dollar cross and other Forex pairs (the FibStalker Views on Forex), indices or commodities futures, articles on my trading method, market commentaries and HFT/Program Trading articles and more. Please, register here to receive the free weekly newsletter.

If you like this article, please share it with your friends and fellow traders. Thank you.

Should you decide to operate based on this information you are invited to do your own due diligence, find a registered trading adviser and understand and accept all the risks involved. This information is for educational purpose only. Please read the Disclaimer.

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