March '25 Contract Roll GapCool reaction from the March 2025 rollover gap. Price created a BPR - Overlapping a bullish gap by a bearish gap
ESH2016 trade ideas
MES: Ice and Fire Could Blow the U.S. Economy Off its CourseCME: Micro E-Mini S&P 500 Futures ( CME_MINI:MES1! ) #Microfutures
In “A Song of Ice and Fire”, American author George Martin painted a mystical land where dragons spit out flame to destroy a whole city and a winter that last one hundred years. Game of Thrones, the popular HBO TV series, was adapted from Martin’s book.
In 2025, we seem to be reliving these moments. California wildfires have claimed dozens of lives, burnt down thousands of homes, and caused an estimated $250 billion in damage.
Meanwhile, Winter Storm Blair raged coast-to-coast, bringing heavy snow across the Great Plain to Mid-Atlantic. The storms shut down interstate highways, caused thousands of airport delays and racked up 350,000 power outages. At the time of this writing, Polar Vortex is bringing freezing temperature back to the lower 48 states.
These weather perils are very destructive. In my opinion, the forces of nature could cause real damage to the entire U.S. economy.
Firstly, we could see a rebound in inflation
The Bureau of Statistics (BLS) reported that US CPI increased 0.4% in December and went up 2.9% year-over-year (YoY). Of which, the energy index decreased 0.5% YoY with energy commodities gasoline and fuel oil falling 3.4% and 13.1%, respectively. In contrast, energy services such as electricity increased 2.8% and natural gas (piped) rose 4.9% YoY.
The chart shows a correlation between CPI and natural gas prices. The underlying logic is the U.S. economic reliance on natural gas. According to the Energy Information Administration (EIA), about 43.1% of the electricity in the country was generated by natural gas.
In “Nat Gas: Trading the Weather”, I explained how cold temperatures increase natural gas demand for generating electricity and heating up homes.
Higher natural gas prices affect not just the storm-hit regions, the entire country also bears a higher cost for energy services. Larger utility bills raise the cost of producing and distributing all goods and services.
A leading indicator: When natural gas prices rise, inflation will likely go up.
Conclusion: As natural gas went up sharply, we could expect a higher CPI for January.
Secondly, we could see economic slowdown and higher unemployment
Many businesses in the passage of winter storms suffered loss of sales. People in parts of Los Angles were evacuated. The total cost for insurance payout, loss of revenue, debris cleanup and rebuilding amounts to hundreds of billions of dollars. Total US GDP was $28 trillion last year, or about $2.3 trillion per month. A quick calculation shows that the weather perils could shave off 1/10th of the US national output for the month of January!
Many S&P 500 companies are based in California or in the storm-hit regions. The actual damage to them will be revealed when they report quarterly earnings in April and May. The Bureau of Economic Analysis will report Q1 GDP on April 30th.
US unemployment has been on the rise since mid-2023. In my opinion, the A.I. driven technological revolution is responsible for many High-Tech layoffs. On January 10th, the BLS released its nonfarm payroll report and showed that unemployment in the Information sector was 98,000 in December 2024, up from 86,000 a year ago.
December is the busiest month for the Retail sector. However, retailers report total unemployment of 897,000 for the month, up 87,000 or 11% from December 2023.
When the BLS updates its payroll report in January, I expect to see higher unemployment data. The month-to-month data could be even worse, as January is usually a slow month after the December holiday season. In addition, winter storms and wildfires would push more businesses to shut down and lay off employees.
Finally, the uncertainty around economic policies under the new administration
I expect President Trump to raise “ice and fire” on his own. If his first term is any guide, we would see plenty of drastic policy changes impacting various industries. Uncertainties are not well embraced in the world of investment. Any new policy initiative could bring the market to chaos when the news breaks, regardless of its long-term effect.
During the first term, important policies (such as new tariff) were usually announced from Twitter tweets. This time around, they would likely come out of Truth Social tweets.
Trading with Micro E-Mini S&P 500 Futures
In my opinion, the U.S. stock market will face more volatility in the coming months. Key economic data could be disappointing for investors.
• When the January nonfarm payroll report is released on February 7th, monthly employment data could trend lower, while unemployment rate ticks up. Signals of economic weakness could send the stock market lower.
• When the January CPI data is released on February 12th, the headline inflation could move higher. If this is the case, the Fed is less likely to lower interest rates. The stock market will face downward pressure.
• The Fed will meet on January 29th. According to CME Group FedWatch Tool, the futures market prices a Fed decision of no-change at 97.9%. However, the market consensus shows that Fed Funds rates could drop to 3.25-4.00% by December, indicating 1-4 rate cuts in 2025. The Fed has not committed to any further rate cut.
www.cmegroup.com
Given these scenarios, a trader could explore short-term opportunities by shorting the S&P 500 prior to the Big Report Dates.
The CFTC Commitment of Traders report provides further support to this thinking. The latest data shows that, as of January 14th, Leverage Funds hold 151,543 long positions and 448,908 short positions for E-Mini S&P 500 futures.
Despite the S&P nearing its all-time high, “Smart Money” already turns bearish. Shorts outweigh longs by a 3-to-1 ratio.
• They are also bearish on Nasdaq 100, by a 1:2 long-short ratio (43,254 vs. 82,724)
• This contrasts with the Dow contracts sharply. Leverage funds own Micro Dow by a 3:2 long-short ratio (17,591 vs. 10,051) during the same period.
The MES contracts offer smaller-sized versions of CME Group’s benchmark S&P 500 futures (ES) contracts. Micro futures have a contract size of $5 times the S&P 500 index, which is 1/10th of the E-Mini contract.
Micro contracts are very liquid. CME Group data shows that 1,095,979 contracts were traded on Thursday, January 16th. Open Interest at the end of the day was 129,228.
Buying or selling 1 MES contract requires an initial margin of $1,525. With Friday closing price of 6,040, each March contract (MESH5) has a notional value of $30,200. Compared with investing in stocks, the futures contracts offer a built-in leverage of about 20 times (=30200/1525).
Hypothetically, if S&P futures price falls 10% to 5,436, the price change of 604 points (6,040-5,436) will translate into $3,020 in profit for a short position, given each index point equal to $5 for the Micro contract. Using the initial margin of $1,525 as a cost base, the trade would produce a theoretical return of 198% (=3020/1525).
The risk to short Micro S&P is that the US stock market continues its spectacular rally. To limit the downside risk, a trader could set up a stop-loss when entering a short position.
For illustration, a short trade executed at 6,040 could be combined with a 6,200 stop. If the S&P goes up to 6,500, the trader’s position would be liquidated well before that. The maximum loss would be $800 (= (6200-6040) * $5).
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
ES Futures -
ES Futures Current week Plan ( 19 - Jan -2025 )
ES is currently making HH and HL , I am currently watching for a potential BID Spots .
1st zone - Break and retest of previous High + 50 DMA + Trend line break & retest
2nd zone - PDL sweep + Trend line Support
3rd zone - Break and retest of 14 jan high which is not yet retested
Enter shorts at your own risk and never fight against the trend .
SPX Futures in 8H timeframe Hello
According to EW principles, one of the most controversial analysis in the market is to count a corrective waves and it is exactly what is happening for SPX. There are only one more scenario and it is when we count (ABC) down to RED CIRCLE all that happened is considered as wave 1 of 5 (green counting).
I am waiting to see what will happen for out trend when it touched upper boundary of the channel.
In all scenarios this is not the trade time for S&P.
Thanks
$ES1 Could Break UP!!Bearish Divergence not playing out. When divergences don't play out, the moves should be strong...In the OPPOSITE direction.
Neutral set upThe structure on Tuesday in the S&P 500 daily chart is neutral going into Wednesday's CPI numbers. This creates a 50-50 type structure but I think the bias is for move to the upside.
Risk onThe strong price movement in the Wednesday S&P 500 daily chart Indicates Risk On. This means that capitals flowing to the S&P 500 futures market as a result of fundamental support for that movement. The expectation for Thursday is follow-through to the upside but not the same size of movement seen on Wednesday.
ES continue with the UptrendOn ES , it's nice to see a strong buying reaction at the price of 5999.00.
There's a significant accumulation of contracts in this area, indicating strong buyer interest. I believe that buyers who entered at this level will defend their long positions. If the price returns to this area, strong buyers will likely push the market up again.
Uptrend and high volume cluster are the main reasons for my decision to go long on this trade.
Happy trading
Dale
Confident closeThe close in the S&P 500 daily chart on Friday was a confident close going into the holiday weekend. Positive movement to the next level is 6060 on the shortened trading session on Monday.
MES!/ES1! Day Trade Plan for 01/16/25MES!/ES1! Day Trade Plan for 01/16/25
📈 6060
📉 5940
1/2 way mark 📈 6031 & 📉 5969
Like and share for more daily ES/NQ levels 🤓
*These levels are derived from comprehensive backtesting and research, demonstrating over 90% accuracy. This statistical foundation suggests that price movements are likely to exceed initial estimates.*
ES Futures Trade Idea - Trump Inauguration MLK weekMacroeconomic News:
US markets were closed yesterday for Martin Luther King Jr. Day. ES, NQ and YM futures saw mild gains yesterday, RTY futures outperformed.
As the 47th president of the United States, Donald Trump took the oath of office promising to protect the border, address inflation, and restructure trade policies. In addition to withdrawing from the Paris Climate Treaty and signing orders to cancel 78 Biden-era acts, he also started energy production reforms, such as drilling for oil in the Arctic. Trump discussed agreements over TikTok ownership, threatened global tariffs, and suggested imposing duties on the EU, Canada, and Mexico. He urged a speedy conclusion to the conflict in Ukraine and gave top priority to evaluating China's adherence to trade agreements. Trump stopped importing oil from Venezuela, emphasized energy independence, and lifted sanctions on Israeli settlers. The goal of bold measures is to put American workers and security first.
Following yesterday's strong selling pressure, which was brought on by the announcement that President Trump would not impose tariffs on the first day of his presidency, the dollar is now showing signs of recovery. Nevertheless, Trump's statement that he is considering 25% tariffs on Canada and Mexico and believes they would be implemented on February 1st shattered trade confidence overnight.
In our opinion, buy the rumor-sell the fact, sell the rumor-buy the fact, will likely be a key theme during Trump’s presidential term.
ES Futures update:
As we can see in the chart above, ES futures are currently above our Line in the Sand, Yearly Open at 5,949.25.
ES futures also made a higher low on Jan 13th, 2025 compared to Nov 4th, 2024 swing low.
ES futures formed a bull flag after the Dec 18th, 2024 FOMC announcement. Price has now broken out of the bull flag channel.
Key Levels to Watch
Key levels represent areas of interest and zones of active market participation. The more significant a key level, the closer we monitor it for potential reactions and trade setups in alignment with our trading plan.
Jan 6th Weekly Hi: 6,068.25
Jan 13th Weekly Hi: 6,051.50
Yearly Open | LIS (Line in Sand): 5,949.25
Resistance R1: 6,105 - 6,115
Resistance R2: 6,145 - 6,155
All time highs: 6,184.50
Scenario 1: Breakout continuation
Price has broken out of bull flag formation from the Dec 18th, 2024 FOMC announcement. Break above current area of consolidation marked in Blue zone forming the area between Jan 6th and Jan 13th Weekly Highs. Price heads towards R1, R2 and R3 targets.
Scenario 2: Further consolidation
Price further consolidates this week awaiting a catalyst to trend higher next week. Strong earnings season propels US futures and stocks higher.
We encourage you to monitor these levels closely and incorporate them into your trade planning. Share your thoughts or insights on these key levels in the comments below.
AMP Futures - How to access Futures optionsIn this idea we will demonstrate how to access Futures options using the Tradingview platform.
Behind the Curtain: Key Influencers of S&P 500 Futures Returns1. Introduction
The S&P 500 Futures (ES) represents one of the most actively traded futures contracts globally, serving as a benchmark for U.S. equity markets. Its liquidity and versatility make it a prime choice for traders seeking exposure to market movements. However, the factors driving these movements are far from random. Economic indicators often play a pivotal role in influencing the direction and volatility of S&P 500 Futures.
In this article, we dive into how various economic indicators shape the performance of S&P 500 Futures on daily, weekly, and monthly timeframes. Leveraging machine learning, specifically a Random Forest Regressor, we’ve identified the top drivers of these futures’ returns. The findings offer traders actionable insights to fine-tune their strategies and understand the broader market dynamics.
2. Understanding S&P 500 Futures
Product Specifications:
Tick Size: Each tick represents 0.25 index points, equivalent to $12.50 per tick.
Trading Hours: Nearly 24-hour trading cycle, ensuring liquidity across time zones.
Micro Contracts:
Micro E-mini S&P 500 Futures (MES): Designed for smaller-scale traders with a contract size 1/10th of the standard E-mini contract.
Advantages: Lower initial margin requirements and smaller tick values allow traders to manage positions more flexibly.
Margin Requirements:
Initial and maintenance margins vary based on volatility and market conditions. Currently around $15,500 per contract.
Micro contracts offer significantly lower margin requirements, making them ideal for retail traders or those testing strategies. Currently around $1,550 per contract.
3. Key Economic Indicators Influencing S&P 500 Futures
Daily Impacts:
1. Labor Force Participation Rate:
Reflects the percentage of the working-age population that is employed or actively seeking employment.
A rise in this rate often signals economic optimism, driving equities higher.
2. Building Permits:
Tracks the number of new residential construction permits issued.
A strong rise in permits indicates confidence in the housing market, which can positively
influence broader economic sentiment and equities.
3. Initial Jobless Claims:
A leading indicator of labor market health, providing real-time insights into layoffs.
Weekly fluctuations can significantly impact intraday futures trading.
Weekly Impacts:
1. Corporate Bond Spread (BAA - 10Y):
A measure of credit risk in the economy, reflecting the difference between corporate bond yields and Treasury yields.
Widening spreads often signal economic uncertainty, weighing on equity markets.
2. Velocity of Money (M2):
Represents the rate at which money circulates in the economy.
High velocity can indicate economic expansion, while slowing velocity may suggest stagnation, affecting equity futures trends.
3. Net Exports:
Tracks the balance of a country’s exports and imports.
Positive trends often boost market optimism, whereas persistent deficits can trigger concerns about economic health.
Monthly Impacts:
1. Oil Import Price Index:
Reflects the cost of imported crude oil, which has ripple effects on production costs across industries.
Rising oil import prices may pressure corporate earnings, impacting the broader S&P 500 index.
2. PPI: Processed Foods and Feeds:
Tracks price changes in processed agricultural products, offering insights into supply chain pressures.
Sharp increases can hint at inflationary risks, influencing long-term equity market sentiment.
3. Consumer Sentiment Index:
o Measures consumer confidence, a leading indicator of economic health.
o High sentiment often signals robust consumer spending, which supports equities.
4. Applications for Different Trading Styles
Day Traders:
Focus on daily indicators like Initial Jobless Claims and Labor Force Participation Rate.
Example: A sudden drop in jobless claims could signal short-term economic strength, providing day traders with bullish opportunities.
Swing Traders (Weekly):
Leverage weekly trends like Corporate Bond Spread or Velocity of Money (M2).
Example: A narrowing bond spread might indicate improving business confidence, aligning with medium-term bullish positions.
Position Traders (Monthly):
Use monthly indicators such as Oil Import Price Index and Consumer Sentiment Index to identify macroeconomic trends.
Example: Rising consumer sentiment could indicate a stronger economy, supporting long-term bullish strategies in S&P 500 Futures.
5. Risk Management Through Indicator Analysis
Refining Entry and Exit Points: Use indicator data to align trades with anticipated market shifts. For instance, an uptick in the Oil Import Price Index might signal upcoming headwinds for equities.
Managing Leverage: Understanding the volatility drivers like Treasury Yields can help traders adjust position sizes to manage risk effectively.
Diversification Across Timeframes: Incorporate insights from multiple timeframes to hedge risks. For example, while short-term indicators may suggest volatility, long-term metrics can provide stability signals.
Hedging Strategies: Use correlated assets or options to mitigate downside risks. Combining economic indicator analysis with market seasonality can enhance portfolio resilience.
6. Conclusion
Economic indicators provide invaluable insights into the drivers of S&P 500 Futures, helping traders align their strategies with market trends. Whether focusing on daily volatility from indicators like Initial Jobless Claims or broader monthly trends such as the Consumer Sentiment Index, understanding these relationships can enhance trading decisions.
By leveraging machine learning and data-driven analysis, this article highlights how indicators shape market movements across various timeframes. The insights empower traders to adopt tailored approaches—whether intraday, swing, or long-term—while improving risk management practices.
This framework not only applies to S&P 500 Futures but can also be extended to other markets. Stay tuned for the next article in the "Behind the Curtain" series, where we explore another futures market and its relationship with key economic indicators.
When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies.
General Disclaimer:
The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
what, are we now bleeding into Trump's nomination?We still look okay, not bearish, but looks like more sideways
Trump pump incoming afterwards?
M15 'Real' Market StructureFor those who are interested in what we do inside traderbuddy (besides the 28Dto100K Challenge offcourse).
Here is a markup M15 ES with 'Real' Market Structure.
For clarity, offically we are still in a downtrend on the M15 and waiting to see how it will react to the 'Extreme'
ES/SPX Morning Update Jan21stYesterday showcased a textbook display of failed breakdown trades in ES, with targets at 6066 (hit), 6074 (hit), and 6087 yet to be hit. Mentioned sunday 6005 would be actionable on a test an recovery and buyers agreed late monday. We’ve tapped 6066 three times, creating a tricky chop zone from 6066 to 6016-20—over-trading here can be costly.
As of now:
• 6043 = support to keep 6066, 6074, and 6087+ in play
• If 6043 fails, look to sell down to 6033 and 6016-20
Follow-through is expectedFollow-through from buyers in the S&P 500 market is expected. The next objective is 6100. Ideally a close above this level what happened within the next two days.
ES/SPX Morning Update Jan 16thYesterday, CPI took us up to targets 5965 and 6004, right at a major resistance that held firm overnight. The market remains tricky—consider reducing your position size for today til more setups emerge
As of now:
• 5984 = support; it must hold to keep 6004, 6016, and 6043+ in play
• If 5984 fails, look for a selloff to 5972, then 5952
#ES_F Day Trading Prep Week 1.20 - 1.24Market closed outside of Value after failing under 6074 - 54 HTF Edge.
We are set to open inside 6064 - 23 Intraday Range unless market gaps under/over after Mondays Holiday but if we open inside it then that tells us we are over Value and there are two thing we can do here, continue grinding/balancing inside the Intraday Range and try to push towards/into above Edge ?
Or do we find more selling over Value that would bring us back into/under VAH, if we get under VAH we would be under Daily Stops so that could trigger moves towards the Mean/VAL of the range. If we do get back inside the Value we could find support and holds around it BUT careful if we take out out and get under Value, that can bring in more weakness for lower targets where we would watch for any continuation.
IF the strength from last week stays, for us to see any bigger prices out of this HTF Range we would need to hold over VAH and have a strong push into or over the above Edge that would stay over, until then we have December supply trapped over 6050 - 74 so we may stay under this area and most of December Supply is valued over 930 - 70s and we have January month end approaching which means if more size needs to lighten the bag that could trigger some lower destinations.
Sideways moveThe expectation for the Friday movement on the daily chart for the S&P 500 is a sideways move. Thursdays price action implies the possibility of profit-taking. If this is the case that means follow-through to the downside would not be typical.
Elliott Wave View on S&P 500 Futures (ES) Looking to Resume HighShort Term Elliott Wave view in S&P 500 Futures (ES) suggests that rally to new all time high on 12.16.2024 at 6163.75 ended wave ((3)). Pullback in wave ((4)) is proposed complete at 5808.4 as the 1 hour chart below shows. Internal subdivision of wave ((4)) unfolded in a double three structure. Down from wave ((3)), wave (W) ended at 5866 and wave (X) ended at 6107.5. Wave (Y) lower ended at 5809 which completed wave ((4)).
The Index has turned higher in wave ((5)), but it still needs to break above wave ((3)) at 6163.75 to rule out a double correction. Up from wave ((4)), wave ((i)) ended at 5918.5 and wave ((ii)) pullback ended at 5842.50. Index nested higher in wave ((iii)). Up from wave ((ii)), wave (i) ended at 5898.75 and pullback in wave (ii) ended at 5848.75. Wave (iii) higher ended at 6017.50 and pullback in wave (iv) ended at 5961.75. Final leg wave (v) ended at 6078.25 which completed wave ((iii)). Dips in wave ((iv)) ended at 5994.5. Expect wave ((v)) to complete soon which should end wave 1 in higher degree. Afterwards, it should pullback in wave 2 to correct cycle from 1.13.2025 low in 3, 7, or 11 swing before it resumes higher.
ES/SPX Morning Update Jan 20th.... *Futures Closes At 1PM ET*NYSE is closed today, and ES will close early at 1pm—so tread lightly and no overtrading. Most professionals are not trading today. At 6pm on Thursday, a Failed Breakdown at 5974, triggering a long that took us all the way to 6043.
As of now:
• Hold runners; expect 6043-6016 to be a chop zone, with 6033 as the midpoint pivot
• Reclaiming 6033 could target 6043, 6049, and 6066+
• If 6016 fails, look to sell down to 6004
ES/SPX Morning Update Jan 17thAt first glance, the market’s final hour yesterday looked bearish. However, for those who dont trade with retail..but trade against retail, things were simple. Just wait for retail to get trapped..aka failed breakdown setups (highlighted in plan for today), it was a clear long opportunity. We dipped below the 5974 and 5966 major zones, trapped shorts as usual, and triggered longs for buyers. Now, just hold runners—no further action needed, approaching our 6016 target. Remember, most professional traders dont trade on Fridays, and i rarely do as well. It's usually just managing runners from Thursday…if i have any. Capital preservation should be your main goal every Friday, with the only set ups being took are textbook failed breakdowns.
