Tag Archives: S&P 500 Futures (ES)

Trading Timeframes

Due to a recent request to publish a video, I’ve dropped in a ‘quick n dirty’ here. I talk about trading timeframes, classic setups, and market differences. A rough cut, I admit.

Most of the books I’ve read don’t spend enough time on timeframe. The fastest way to lose money is adjusting your trading timeframe when a trade goes against you. I try to drive that point home, it’s important. The second point I try to make is that different markets behave differently. The same setups don’t work the same across markets, as you’re lead to believe.

I talk for a bit about GC and how even with the best setup, Gold is a market which will devour a stop order.

I hope you enjoy the video, I’ll publish more and better videos, soon.

Good Trading.

Good Morning Viatnam – S&P Retracement Levels

This morning it was ALL Japan – not Viatnam – I admit, but I woke up with Robin Williams ringing in my head.

 

The Nikkei extended their losses after:

  • BOJ REFRAINS FROM EXPANDING J-REIT, ETF PURCHASES
  • BOJ LEAVES FUNDING TERMS UNCHANGED AFTER JGB YIELD VOLATILITY

This sent the US and European markets into a tailspin. Expectations were obviously not met. It’s not often you see a gap open in the S&P down 1%. A bit unexpectedly the ES has been working off it’s overnight fear all day. Remember there’s a big buyer stalking…

Considering a slightly longer term, I’ve been looking at some potential cycles that might make good targets. If you’re even slightly bearish this perspective might interest you. If you’re bullish these might make good entry points.

I looked at three of the last major retracements during this bull market on a yearly chart.

  • September-November 2012
  • March – June 2012
  • May – September 2011

I measured the range as a percentage and measured the duration between the high and low. I’ve written about it, here. This is what I come up with:

Retracement Targets

If history rhymes, the medium term levels to keep an eye on:

  • 1558
  • 1515
  • 1400

And if this pullback continues we should be attentive around:

  • July 23rd
  • August 1st
  • October 24th

Even at these targets on the yearly chart, the market will still be trending upward. Count on the bears coming out of the woodwork.

Good Trading

Robin Williams

Spy Weekly Chart

Welcome Back Volatility?

After months of slow creep, looks like volatility might be back in vogue. I’m sticking with the ranges I mentioned here, here, and here.

  • 138.22 — Thursday – High Bar
  • 136.63 — Monday – Dense – Thursday
  • 135.80 — Tuesday – Support and Resistance
  • 134.25 — Tuesday (ish) – Resistance
  • 133.72
  • 131.50

Spy Weekly Chart

The early momentum this morning is coming from Europe with some possible closure on the Greek bond swap fiasco threatening resolution. The headline risk this morning from the US is the Nonfarm Payrolls number. My levels of comfort are 138.22 on the high side and 135 on the  low side. Outside those ranges, I’ll make adjustments.

Gold looks particularly interesting this morning the GC_F bounced off $1665, I was looking for $1650 and didn’t get into anything, but it’s worth watching. This 1550 – 1800 channel looks to be holding up well.

Good Trading.

Market Openings

Trading hours aren’t as easy to get a handle on as you would think…

Lets say you’re living in Paris and you want to trade e-Mini S&P futures, you’d go to the CME Group and have a look at their site, right? Well the CME Group posts opening hours in Chicago Time – CT (though I think “CT” stands for Central Time not Chicago Time…), great, unless you’re used to trading on the NY markets in New York Time –  which is ET, Eastern Time (not NYT – which would be the New York Time(s)).

Opening hours analysis should be one of those standard questions on college entrance exams:

You’re living in Paris which is GMT +/- ? (2 if you’re interested), it’s Monday during daylight savings time, what time is it in NY when the CME starts trading E-mini S&P 500 futures? Bonus: It’s Sunday and you’re visiting London… Convert all answers to GMT +/- n.

Asian Markets (NOT daylight savings time)

Sydney, S&P/ASK 200: 5 pm New York = 11 pm France

Tokyo, Nikkei: 7 pm New York = 1 am France

Hong Kong, Hang Seng: 9 pm New York = 3 am France

CME Futures

E-mini S&P 500 Futures Sunday = Midnight France $ES_F (bonus answer: GMT +1 or 11pm London)

Encore 45

This Morning:The European markets are dipping this morning, not exactly plunging like yesterday CAC40 (-1.4%), FTSE (-0.5%), DAX (-0.4%), not yet in any case. The banks continue to fall with BNP down over 7% on rumors that they can’t borrow dollars.
Now: The European markets and the CAC40 (+1.13%) in particular have closed in the green. All that fuss about BNP went away with one press release.

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Welcome Back Europe

Today was the start of the school year here in France. Le rentrée. Welcome back DSK, welcome back BNP and Societe Generale. Wasn’t it better on the beach (or in prison)?

Merger Rumors? That’s a silly desperate long-shot: a lazy distraction.

The EUR.USD has broken under 1.40000. That’s a psychological level that’s held since this past July.

It’s Europe’s turn to scramble. There are parallels to the lovely little Republican -Democratic debt ceiling pissing match. But the obvious difference is that there are 17 members in the Eurozone each trying to cover their constituents proverbial backside.

It’s like 17 Tea Parties running amuck at the Republican National Convention!

American talking-heads say Europe is headed for disaster. Journalists looking for a story are like traders looking for resistance and breakouts. “The EU has to breakup, there could be civil war…” Count on UBS and ZeroHedge to titillate the gossiping financial classes with end-of-world scenerios. Here’s an example (link) and here’s another (link). And why not FT-Alphavilles “Who is the doomiest of all?”

Even if the end-of-world is near, it feels like we’re being “hard sold” a short position from a used car salesman. That’s a great sign to be sceptical. The unexpected move from the Swiss ($EURCHF) got me thinking about all that I don’t know. What other surprises might drop from the sky this week?

I have a good short position on the Euro but I’m starting do doubt it’s longevity. The Eurozone is a mess, agreed, but it’s structural. Therefore, fixable… Right? Who cares if the Greeks leave the Eurozone? Italy and Spain have huge black market economies, they’ll get by. Bridges and Tea Party extremists might save the US but you have to admit, consumption (demand) is maybe even MORE important… But is it AS important in Europe? They’re mostly Socialist, relatively poor, and good savers. European countries have historically dealt with far worse. Think German unification or Franco. But thinking about the US, since the civil war, what significant transformation have Americans’ “overcome”? September 11th? The jury is out still.

The perceived problems in Europe are potentially ‘less real’, than the perceived problems in the US. Just saying…

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Market Restart

I’m a bit perplexed with the current market optimism. Having digested 3 weeks of ‘the sky is falling’, the talking heads are turning on us again. Asian markets closed up and Europe has opened up.

Caution is the keyword today. Let me give you a few reasons why:

  • Dec ’11 Gold Futures this morning are up at 1798 GLD
  • There’s a gap to fill
  • SPY Sitting at resistance and Futures are weak ES_F
  • VIX remains elevated
  • Low relative volume

Option pricing remains a bit confounding as if directional bets are off. It looks like straddles are the strategy of choice.

The Case Shiller, Consumer Confidence, and FOMC meeting minutes are all released today. My sense is that after yesterday’s melt up, any positive news today will play well for the bulls. And that any negative news won’t have much impact.