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ES1! trade ideas

The Setup, More than NVDAE-mini S&P (September) / E-mini NQ (September) S&P, yesterday’s close: Settled 5637.00, down 15.00 NQ, yesterday’s close: Settled at 19,591.25, down 199.25 E-mini S&P and E-mini NQ futures consolidated lower on Monday in a healthy manner. Despite a dovish Fed Chair Powell at Jackson Hole Friday and bursts of strength across the indices in response to his tone, nothing really changed; the odds of three and four rate cuts this year have not budged, and the market is essentially right back into range. In addition, our opinion is little changed; the CME’s FedWatch Tool signaling 100bps worth of cuts through yearend at a 70.5% probability is overzealous and the rebound from the August 5th volatility event is too clean. Most of our readers are familiar with our style, so for those of you who are not, we are rarely negative on the stock market, but right here, right now, outside of one binary factor (NVDA earnings), we believe the risks are skewed to the downside as those probabilities are to be reined in and volatility will have a gasp at the least. Yesterday’s opening bell range in the E-mini S&P was a classic stop sweep, trading to a new swing high of 5669, just shy of our major three-star level at 5672.75, before reversing 40 points. We now have major three-star resistance at 5669-5672.75 and a new line in the sand in which a close above will reinvigorate bullish tailwinds. Remember, we still have a critical line in the sand for the E-mini NQ at 19,925. With some early weakness, the most crucial level for each the E-mini S&P and E-mini NQ comes in at 5599.25-5603.25 and 19,462-19,495, where a break below is likely to invite heavy waves of selling. Bias: Neutral Resistance: 5637-5646.50***, 5652.50-5655.25**, 5661.75-5665.25**, 5669-5672.75***, 5717.25-5721.25**** Pivot: 5631 Support: 5618.50-5624***, 5614.25**, 5599.25-5603.25****, 5593.25-5594.50***, 5573.50-5582.75***, 5558.50-5560.25**, 5547.50-5551.75***, 5526.75-5536.50*** NQ (September) Resistance: 19,643**, 19,680-19,705**, 19,783-19,801***, 19,832-19,867***, 19,904-19,925****, 19,981-19,995*, 20,025-20,085**, 20,150-20,180***, 20,355-20,371** Pivot: 19,578-19,618 Support: 19,514-19,544**, 19,462-19,495***, 19,394** Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: 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 *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. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
CME_MINI:ES1!
by Blue_Line_Futures
2024-08-27 - priceactiontds - daily update - sp500Good Evening and I hope you are well. tl;dr Indexes - Yeah I spare you your time. Markets have no idea where to go right now but I think Nvidia earnings can move it for good. Absolutely no opinion on those earnings and how market will react. I don’t like to gamble on such things. sp500 e-mini futures comment: I won’t conjure much words today for a market inside a 50 point triangle. Clear support and resistance visible. Either scalp it to both sides or wait for the breakout. No opinion on which side the breakout will happen. Both sides have arguments and I won’t try to guess it. current market cycle: trading range key levels: 5600 - 5670 bull case: Bulls want to get above 5670 and to make the bears give up so they can print a new ath or at least 5700 again. I do think many bulls will give up below 5550 but that’s far away for now. Currently no more magic to it. Invalidation is below 5580. bear case: Bears coming through with selling spikes rather than consecutive bear bars or sustained selling. I think many stops will be around 5675-5680 and market would probably print 5700 fast then. If Nvidia misses and market pukes, below 5580 I will heavily favor the bears to reverse the madness. Invalidation is above 5675. short term: Neutral as it gets. medium-long term: Bearish. I gave the 5000 target 3 months ago and we almost got there way earlier than expected. There is a reasonable chance we will see an event unfolding over the next days/weeks. Something breaks during these violent moves and this time will not be different. current swing trade: Nope. trade of the day: Buying the bear trap at the open anywhere below 5619. Second best was any long around 5628 since market is trying hard to show you this is support for now. Selling 5649 was also decent. Trading range with clear support and resistance. Buy low, sell high and scalp.
CME_MINI:MES1!
by priceactiontds
Volatility in Focus: A Trader's Perspective on S&P 500 Futures1. Introduction Volatility is a critical concept for traders in any market, and the E-mini S&P 500 Futures are no exception. Traditionally, traders have relied on tools such as the Average True Range (ATR) and Historic Volatility (HV) to measure and understand market volatility. These tools provide a snapshot of how much an asset's price fluctuates over a given period, helping traders to gauge potential risk and reward. ATR measures market volatility by analyzing the range of price movement, often over a 14-day period. It reflects the degree of price movement but doesn’t differentiate between upward or downward volatility. Historic Volatility looks at past price movements to calculate how much the price has deviated from its average. It’s a statistical measure that gives traders a sense of how volatile the market has been in the past. While these traditional tools are invaluable, they offer a generalized view of volatility. For traders seeking a more nuanced and actionable understanding, it's essential to distinguish between upside and downside volatility—how much and how fast the market moves up or down. This article introduces a pragmatic, trader-focused approach to measuring volatility in the E-mini S&P 500 Futures. By analyzing daily, weekly, and monthly volatility from both the upside and downside perspectives, we aim to provide insights that can better prepare traders for the real-world dynamics of the market. 2. Methodology: Volatility Calculation from a Trader’s Perspective In this analysis, we take a more nuanced approach by separating volatility into two distinct categories: upside volatility and downside volatility. The idea is to focus on how much the market tends to move up versus how much it moves down, providing a clearer picture of potential risks and rewards. Volatility Calculation Method: o Daily Volatility: Daily upside volatility is calculated as the percentage change from the prior day's close to the next day’s high, assuming the next day’s high is higher than the prior day’s close. Daily downside volatility is the percentage change from the prior day's close to the next day’s low, assuming the next day’s low is lower than the prior day’s close. o Weekly Volatility: Weekly upside volatility is determined by comparing the previous Friday’s close to the highest point during the following week, assuming the market went higher than the prior Friday’s close. Weekly downside volatility is calculated by comparing the previous Friday’s close to the lowest point during the following week, assuming the market went lower than the prior Friday’s close. o Monthly Volatility: Monthly upside volatility is measured by taking the percentage change from the prior month’s close to the next month’s high, assuming prices moved higher than the prior monthly close. Monthly downside volatility is calculated by comparing the prior month’s close to the lowest point of the following month, assuming prices moved lower than the prior monthly close. 3. Volatility Analysis The E-mini S&P 500 Futures exhibit distinct patterns when analyzed from the perspective of upside and downside volatility. By measuring the daily/weekly/monthly fluctuations using the trader-focused approach discussed earlier, we gain valuable insights into how the market behaves on a day-to-day basis. Key Insights: Trend Observation: The data reveals that during periods of market distress, such as financial crises or sudden economic downturns, downside volatility tends to spike significantly. This indicates a greater propensity for the market to fall rapidly compared to its upward movements. Implication for Traders: Understanding these patterns allows traders to anticipate the potential risks and adjust their strategies accordingly. For instance, in highly volatile environments, traders might consider tightening their stop losses or hedging their positions to protect against sudden downturns. 4. Comparative Analysis: Rolling Volatility Differences To gain deeper insights into the behavior of the E-mini S&P 500 Futures, it’s useful to compare the rolling differences between upside and downside volatility over time. Rolling Volatility Differences Explained: Rolling Analysis: A rolling analysis calculates the difference between upside and downside volatility over a set period, such as 252 days for daily data (approximately one trading year), 52 weeks for weekly data, or 12 months for monthly data. This method smooths out short-term fluctuations, allowing us to see more persistent trends in how the market behaves. Volatility Difference: The volatility difference is simply the upside volatility minus the downside volatility. A positive value suggests that upside movements were more significant during the period, while a negative value indicates stronger downside movements. Key Insights: Trend Observation: The rolling difference analysis reveals that downside volatility generally dominates, particularly during periods of economic uncertainty or financial crises. This confirms the common belief that markets tend to fall faster than they rise. Implication for Traders: Traders could use rolling volatility differences to anticipate changes in market conditions. A widening gap in favor of downside volatility may signal increasing risk and the potential for further declines. Conversely, a narrowing or positive rolling difference could suggest improving market sentiment and potential opportunities for long positions. 5. Volatility Trends Over Time Understanding the frequency and conditions under which upside or downside volatility dominates can provide traders with valuable insights into market behavior. By analyzing the percentage of days, weeks, and months where upside volatility exceeds downside volatility, we can better grasp the nature of market trends over time. Volatility Trends Explained: Percentage of Days with Greater Upside Volatility: This metric shows the percentage of trading days within a given year where the upside volatility was higher than the downside volatility. It highlights the frequency with which the market experienced more significant upward movements compared to downward ones on a daily basis. Percentage of Weeks with Greater Upside Volatility: Similarly, this metric calculates the percentage of weeks in a year where the upside volatility was greater than the downside. It provides a broader perspective on market trends, capturing sustained movements within weekly timeframes. Percentage of Months with Greater Upside Volatility: This metric reflects the percentage of months in a year where upside volatility exceeded downside volatility. It is particularly useful for identifying longer-term trends and understanding the market’s behavior over extended periods. Key Insights: Trend Observation: Historically, again, we can see the data shows that downside volatility tends to dominate, especially during periods of market stress. However, there are years where upside volatility has been more frequent. Implication for Traders: Traders can use these insights to adjust their strategies based on the prevailing market conditions. In years where downside volatility is more frequent, defensive strategies or hedging might be more appropriate. Conversely, in years where upside volatility dominates, traders might consider more aggressive or trend-following strategies. 6. Key Takeaways for Traders The analysis of the E-mini S&P 500 Futures’ volatility, broken down by daily, weekly, and monthly intervals, provides crucial insights for traders. Understanding the distinct patterns of upside and downside volatility is essential for making informed trading decisions, particularly in a market that often behaves asymmetrically. Practical Conclusions for Traders: Risk Management: Given the dominance of downside volatility, traders should prioritize risk management strategies. This includes using stop-loss orders, protective options, and other hedging techniques to mitigate potential losses during volatile periods. Strategic Positioning: Traders might consider adjusting their position sizes or employing defensive strategies during periods of heightened downside volatility. Conversely, when upside volatility shows signs of strengthening, more aggressive positioning or trend-following strategies could be beneficial. Timing Entries and Exits: Understanding the patterns of volatility can help traders better time their entries and exits. For instance, entering the market during periods of lower downside volatility or after a significant downside spike can offer better risk-reward opportunities. Adaptability: The key to successful trading in volatile markets is adaptability. Traders should remain flexible and adjust their strategies based on the prevailing market conditions, as indicated by the volatility analysis. By incorporating these insights into their trading approach, traders can better navigate the E-mini S&P 500 Futures market, enhancing their ability to capitalize on opportunities while managing risks effectively. 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.
CME_MINI:ES1!Education
by traddictiv
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