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ES1! trade ideas

#202428 - priceactiontds - weekly update - sp500 e-mini futuresGood Evening and I hope you are well. tl;dr sp500: 3 Best looking bull bars very late in the trend, breaking above two strong resistance lines. 75% that this is a bull trap and we break down Mo/Tu below 5580 and be on our way to test the daily 20ema and the lower bull wedge/channel line. Will short this on weakness on Monday. Next 500-1000 points are made to the downside. Can I be wrong? Absolutely and everything can and will happen in the markets. Markets can remain irrational longer than you can stay solvent. Yadayadayada. Quote from last week: comment: Bulls got their retest as written and now market is technically free to have a major trend reversal. June was a perfect bull trend from the beginning of the month. Market had 3 legs up with a two legged correction completed now. We could spend more time at the highs in a trading range or have a deeper pullback from here, which is my preferred path forward. The bull trend line will probably be tested around 5460 and there market will decide if it wants to stay above 5400 or get down to 5320/5350. comment: Market tested 5500 twice and since it found no sellers down there, bears stepped aside and bulls printed 3 climactic bull bars very very late in this trend. The odds that this is a legit breakout above multiple resistance lines is very low. Much more likely is a bull trap and market will reverse over the next 1-5 days. current market cycle: Bull trap and the end of this trend is near. Will soon see a deeper pullback and we will form a trading range where the low is 5000. key levels: 5500 - 5630 bull case: Bulls see this AI bubble as legit and markets can only go up. Breaking above the bull trend line from 2023-01 is ok bc Daddy Jensen is signing breasts. That the markets are only held by 7 stocks is also a big buy signal since most eco indicators are puking. Don’t know what to tell you here. Market can obviously go much higher for longer and we can print a couple of higher highs. But I will never join the “this time it’s different” crowd. The only sure thing before bubbles popping is that markets print more and more ridiculous highs while more and more people say “it’s really different this time” and they always popped and always will. That’s the nature of the game. Am I saying you should short this right now? No. Do you want to buy this at 5621? If your answer is yes, I do hope you make money, enjoy my letter and take something from it. Invalidation is below 5580. bear case: 16 Month old bull trend line and couple of more where market want’s to break above on low volume and declining economic activity across the board. Good luck with that. Will never buy into the frenzy. Bull trap most likely and I want to see strong selling before joining. Bears first target is 5500 and shortly after probably the gap close to 5430. Invalidation is above 5630. outlook last week: short term: Neutral until bears get follow through and print lower lows below 5500. I’d short to 5490 and see how market reacts to the daily ema. If the support is weak, more shorting to 5450ish. Absolutely no interest in buying here. → Last Sunday we traded 5521 and now we are at 5621. Meh outlook. Was bearish if market would go below 5500 but it never did, so nothing lost or gained here. short term: Most likely outcome for me is a bull trap above 5600 and we will see a correction over the next weeks. I wait for bear strength before shorting. I will only continue to buy quick momentum scalps if we continue upwards. medium-long term: Bearish if the latest climactic top turns out to be a trap and we trade below 5580 again. If so, we will see a bigger correction down to at least 5450 in the near term and likely also 5300. Still think 5000 will be hit in 2024. current swing trade: None Chart update: Removed the smaller two legged correction and added another bull gap highlighter. Double top did obviously not hold but I still think this is a bull trap and a bigger two legged move sideways to down is more likely.
CME_MINI:MES1!
by priceactiontds
3
2024-07-03 - priceactiontds - daily update - sp500Good Evening and I hope you are well. overall market comment Indexes - SP500 and Nasdaq outdid themselves today again. You still can’t convince me this is another breakout above. SP500 is still marginally higher and it’s a trading range at the highs. Nasdaq broke above the bull wedge and channel and I absolutely expect it to fail over the next 1-5 days and trade down below 20000. Commodities - Gold had a huge bull break above previous support and above the upper triangle line. The pullback tested that line and market held above. If bulls confirm this tomorrow, we will see 2400 and probably higher again. Oil printed a lower high below 84 but bears would need strong selling from here on and a lower low below 82 to confirm it. Oil could trade more sideways before another breakout to either side. Bitcoin continued perfectly inside the bear trend and dropped below 60000 again. Bulls might try one more time to get above 62000 but if this one fails, decent chance we will test 50000 next. It’s a strong sell the rip market and you should not look to buy. sp500 e-mini futures comment: Strong follow through for the bulls since bears could not keep it below 5580. Made a new ath but still not above 5600. Bulls were strong enough that we can expect 5600 to print at least once. Can they get another push up? I have no idea. Still inside the margins of this trading range at the top but I won’t rule out that we can’t print 5650 or higher. Today’s data was really bad but market did not care. No reason why it should turn around tomorrow on low volume or on a Friday. I won’t get tired writing it. If you are bullish at this stage of this bull cycle, no one can help you. Not saying you should not get long on days like today but your long term longs should have a tight stops. Once the euphoria vanishes, it will go down fast when everyone will look for the exit. It’s as unsustainable as it gets. current market cycle: Max bullishness & peak bubble territory. Literally the peakiest of the peaks. Mother of all bubbles. Will end over the next weeks. —unchanged key levels: 5560 - 5600 bull case: Bulls want to keep the party going and if they can stay above the 1h 20ema, they could do another leg up. No deeper reasoning here. If big green bars appear again, buy. Invalidation is below 5560. bear case: No idea if bears step aside for another leg. Can see this turning here after more sideways movement. I would not expect big swings on a US holiday tomorrow. Invalidation is above 5610. short term: Neutral af again. At multiple resistances I won’t do anything. Will look for longs on strong buying near the 1h ema or the lower bull wedge line. If bears appear, need a break of both mentioned before shorting. medium-long term: Bearish. We will see 5000 over the next weeks again and 4600 over the next 12 months. Will update this time and price wise over the weekend but I expect to at least see 5000 over the next months in 2024. —updated weeks to months. current swing trade: None trade of the day: Buy anything. 5m 20ema was your guide today. Could have literally bought any touch.
CME_MINI:MES1!
by priceactiontds
ES continue with uptrend On ES , it's nice to see a strong buying reaction at the price 5539 . 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. The S/R zone from the past and high volume cluster are the main reasons for my decision to go long on this trade. Happy trading Dale
CME_MINI:ES1!
by Trader_Dale
S&P500: Final Sprint!Although the current wave 5 in turquoise has already reached a significant size, and the high should be placed soon, we cannot yet regard it as completed. We therefore continue to give the movement room to the upside. As soon as the high is established, the index should turn and head for our magenta Target Zone (coordinates: 4681 - 4434 points). However, please note our alternative scenario (40% probable). In this case, the index would place the top of the green wave alt. (3) with the next high. Consequently, a reversal and a transition into the wave alt.(5) could already be expected in our green Target Zone (coordinates: 5056 - 4878 points).
CME_MINI:ES1!
by MarketIntel
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CME_MINI:ES1!
by Rommelfuturetrade
1
Navigating Frothy US Equities with S&P SpreadsNavigating frothiness in US equities requires both caution and tact. With the S&P 500 nearing its all-time high amid flashing recession signals, investors must be vigilant with volatility during upcoming earnings season, driven by outsized expectations. This paper explores the persistent recession indicators and forces at play during upcoming earnings. The paper posits a spread trade using CME’s Micro E-Mini futures (Long S&P 500 and Short Russell 2000) to maintain upside potential with reduced downside risk. RECESSION RISKS PERSIST AS RATES REMAIN HIGH On Friday, the PCE Price Index (Fed’s preferred gauge) showed inflation cooling to 2.6% in May, in line with expectations. Price pressures are slowly abating. Numbers aside, the broader economic landscape presents a complex picture. Signals from the job market point to unemployment claimants at a record high for the past two and a half year with job openings shrinking drastically. Personal earnings were higher than anticipated in May (0.5% vs 0.4%), but spending was below expectations. Consumers are being more cautious. Mint Finance covered these nuances in a previous paper . Housing is flashing weakness as new housing starts hit a four-year low in May. Soaring prices and steep mortgage rates are weighing on demand. The Fed’s policy path remains unconfirmed. However, consensus point to a rate cut as early as September. Even if that happens, rates are expected to decline gradually. Source: CME FedWatch Despite risk of recession, the S&P 500 has had an exemplary showing this year, trading near their all-time high. YTD performance of 15% in 2024 has been far higher than the 74-year average of 4%. Yet, the performance has been increasingly top-heavy. Nvidia, Apple, and the rest of the tech titans have contributed much of the gains in the broad S&P500 index as it is market cap weighted. The index is heavily reliant on and sensitive to the performance of these mega-caps. The equal-weighted S&P 500 index is up only by 4% in sharp contrast. The spread between the S&P 500 and its equal-weighted counterpart is near its highest point since 2008. The spreads between the S&P 500 and both the Russell 2000 and S&P Midcap indexes have reached multi-decade highs. Outperformance was re-affirmed after the recent earnings season. Mega-caps crushed EPS and revenue expectations and reported phenomenal guidance while other stocks, especially utility and energy sector reported revenue and EPS figures below estimates according to FactSet report . Rallies in mega-cap stocks are being driven by idiosyncratic tailwinds, such as advancements in AI. Meanwhile, slowing consumer spending in the US is raising concerns for the broader market. RISK OF SHARP CORRECTION WARRANTS SPREAD POSITION According to FactSet , Q1 earnings season was positive. Only 19% of firms reported earnings below expectations. Actual average EPS YoY growth for the index was 5.9% (above 3.4% expected as of March 31). Frothiness in the equity market is palpable. Consistent outperformance by mega caps is baked into investor expectations. Strong earnings are already factored into prices, as evidenced by the S&P 500's P/E ratio of 28.38x (far higher than the 10-year average of 20x translating to a 42% above average earnings expectations). Average P/E ratio in the best performing tech sector is even higher at 37.47x. Even minor shortfalls in guidance or revenue/earnings can lead to significant corrections in such a climate. The FactSet reports that 31.8% of firms which beat earnings EPS estimates by up to +5% saw average price decline of -0.9%. Source: FactSet Research In fact, overall, positive earnings only drove a 0.9% increase in price (1% 10Y historical average) while a negative earnings report led to 2.8% drop (-2.3% 10Y historical average). Source: FactSet Research Market frothiness elevates risk of a sharp price correction in single names during Q2 earnings. Analysts are concerned as expectations for Q2 EPS YoY growth have been lowered from 9% on 31/March to 8.8% as of 22/June. Despite this, mega-caps remain in solid position. Robust demand for AI, buoyant advertising revenue, globalized revenue streams, and substantial market dominance have positioned them to continue growing at a disproportionate rate. In case the upcoming Q2 results pan out similarly to Q1 in favor of mega-caps, the S&P 500 will continue to outperform the broader market indices. HYPOTHETICAL TRADE SETUP The S&P 500, with its high concentration of mega-cap stocks, is likely to perform better than broader market indices in the coming earnings season. However, recession signals are also flashing. The S&P 500 does not perform well during recessions. Over the last four recessions, it has declined an average of -14%. Comparatively the spread between S&P 500/Russell 2000 spread has increased 1.7%. The S&P 500/Russell 2000 spread has also outperformed during the six-month preceding recessions. Given the S&P 500-Russell 2000 spread's historical outperformance during recessions, a spread position presents less downside risk compared to an outright long position in the S&P 500. This strategy also maintains a bullish outlook on the top-heavy S&P 500's potential to outperform in the upcoming season. Moreover, the spread trade preserves the upside potential in the ongoing rally, as its performance has been comparable to an outright long position in the S&P 500. A view on the spread between the S&P 500 and Russell 2000 can be expressed using CME Micro E-Mini Equity futures. At 1/10th the size of the full-size E-mini futures, the Micro contracts allow for smaller trades with more granular exposure. A long position in the Micro E-Mini S&P 500 futures expiring in September (MESU2024) can be offset by a short position on 2 x Micro E-Mini Russell 2000 futures expiring in September (M2KU24). This position is highly margin-efficient as CME offers margin credit for this spread. Hypothetical trade set up in summary requires entry at 2.69x, with a target at 2.78x coupled with stop loss at 2.6x. The simulated payoffs are described below. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. 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 DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.
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CME_MINI:MESU2024Long
by mintdotfinance
4