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MES1! trade ideas

Using Put Options to Protect Your Stock PortfolioCME: Options on E-Mini S&P 500 Futures ( CME_MINI:ES1! ) Last week’s bloodshed of global financial market made history. Nearly all major asset classes fell into a market turmoil driven by tariffs and retaliations. Let’s focus on the US stock market: • Dow Jones Industrial Average dropped 7.76% in the week of March 31st to April 4th, making it the 4th worst weekly performance on record • S&P 500 slipped 8.77%, the 4th worst week in history • Nasdaq Composite fell 9.18%, the 2nd worst week • Russell gave up 9.34%, the 3rd worst week All four stock index futures were in negative territory year-to-date. On Sunday evening, E-Mini S&P 500 opened 178 points lower to 4,932, losing 17.1% YTD. All parties ultimately come to an end. After two years of double-digit gains, the unstoppable US stock market finally cracked. As more tariffs and retaliations are expected to escalate, I am afraid that we are only seeing the beginning, rather than the end. For stock investors, this is a good reminder of market risk, something we always talk about but seldomly pay attention to. The “return of investment” should be focusing on the repayment of your money, a safety issue. Only after that should we talk about the gain from the investment. It is a necessity to protect your portfolio to achieve long-term growth. Trading with Options on E-Mini S&P 500 Futures For investors with a diversified portfolio, Put Options on the E-Mini S&P 500 futures are effective and cost-efficient tools. Investors who long the stocks will lose money, should stock prices fall. Put options would gain in value, providing a hedge to the portfolio. The following illustration shows a hypothetical example, given: • An investor has a $250,000 portfolio holding a diversified pool of U.S. stocks • CME E-Mini S&P 500 futures ( NYSE:ES ) have a contract size of $50 times the index value • The June contract (ESM5) was quoting at 4,935 Sunday evening Friday, making the notional value of 1 contract $246,750, approximately equal to our portfolio value • Assuming the portfolio moves closely in line with the S&P 500 • The investor wants to limit the loss of his portfolio to 12%. If the S&P 500 index is currently around 4950, a put option with a strike price of 4350 would roughly correspond to a 12% decline Hedging trade illustration: • The investor buys 1 put option on the June futures with the strike price of 4,600 • CME quote on that Put option is 223. As the contract is $50 times the index, the premium upfront for one put option contract is $11,150 (223*$50), ignoring any commissions • The put premium is calculated as 4.46% of the $250K portfolio If S&P drops to 4,200 (-15.15%) by the end of April: • Without the put, the portfolio lost $37,879, assuming the same loss with the S&P • The 4600-strike put is now 400 points in-the-money • The investor sells the put and receives $20,000 (= 400 x 50) • The loss of portfolio will be 37879+11150-20000 = $29,029 • With an E-mini S&P put protection to mitigate loss from the stock portfolio, the investor lost 11.6% (= 29029 / 250000), which is 3.5% lower than the S&P loss and with the preset loss limit If S&P drops to 4,000 (-19.2%) by the end of May: • Without the put, the portfolio lost $47,980, assuming the same loss with the S&P • The 4850-strike put is now 600 points in-the-money • The investor sells the put and receives $30,000 (= 600 x 50) • The loss of portfolio will be 47980+11150-30000 = $29,130 • With an E-mini S&P put protection to mitigate loss from the stock portfolio, the investor lost 11.6% (= 29,130 / 250000) As we can see here, when the S&P falls sharply, the investor will be able to cap his loss to 11.6%. In a “protective put” strategy, we would consider the option premium an insurance contract for owning stocks. If the index rises, the portfolio return would be lowered a little because of the premium upfront, that is, the cost of insurance. However, the protection is a lifesaver if the index falls. Before jumping into action, the investor needs to run a correlation analysis using the daily value of the portfolio against the S&P 500 closing prices. Here is how: • Some trading software has correlation feature built in already • If not, pull 1-year daily portfolio balance and 1-year S&P closing prices, export them to Excel. Run correlation test with these two data series using Excel data analysis tool. • Alternatively, we could drop the data into ChatGPT and ask AI to do the work for us. If the correlation is greater than 50%, it means that S&P 500 is a good fit to hedge the portfolio. If it is not, we could try the correlation analysis using the other stock index closing prices, such as the Dow, the Nasdaq 100 and the Russell 2000. Then replace E-Mini S&P 500 futures with the stock index futures contract best fit the portfolio. 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
CME_MINI:ES1!Short
by JimHuangChicago
ES1 - Took Profit on Shorts, Now Time To Go LongS&P Fear & Greed index hit a deep low of 4 on Friday close. The herd are in extreme panic and the media have been blaring fear based news so everyone "knows" that its time to sell. S&P Futures and CFD have gapped down to open the week. The gap hits a 1:1.618 Golden Window extension. We haven't yet had any bounce more than a limp 0.382 retracement where a 3 wave continuation pattern topped out as Trump's tariffs came into effect. And so with no significant bounce, this extension is very deep and there is a decent chance that a significant bullish pivot will print in this area; perhaps tidily within this Golden Window band; between the 1.618 - 1.786 overshoot. ... The 2022 market top support intersects tidily within the Golden Window. There will be plenty of short sellers taking profit at this very significant support. This will be an area of very high liquidity and the market makers love to trade against high liquidity. ... The Week RSI has gone significantly oversold for the first time since the 2020 Pandemic Crash. And the day RSI just went sub 18. The day RSI is actually lower than any time since 2015! And notice that on the Futures chart above there is a very large gap to open the week. Considering the aforementioned, there is decent chance that it is an Exhaustion Gap that would precede a bounce. ... So all of this sets up a nice contrarian trade here. Even with all these technicals, it is a dangerous positional entry in high volatility chart. I think we will likely see another bearish wave following a bounce to complete a high time frame correction with a minimum of 3 correction waves. But a bounce is due really... I have taken profit on stock shorts positions on Friday, sold my crypto short positions as stock index Futures / CFD opened with this detail. Now I am positioned long S&P CFD. Even if it continues to slump, I think this will be due a bounce soon enough. But a tidy Golden Window catch would be ideal. Not advice
CME_MINI:ES1!Long
by dRends35
2
ES1! Open Gap AlertAll futures gaps will fill... but who knows when? We already had an open gap above. This time around, virtually everything has an open gap. Gold futures have a small open gap, BTC futures have a big ass one, Nikkei, FDAX, the rest of Europe and Asia, oil, silver, and other commodities as well. XLF will complete the H&S pattern tomorrow, so maybe we get a bounce Tuesday, who knows? Everything's oversold with open gaps, but there's farther to drop if the tariffs aren't reversed somehow. The GOPs in the House aren't ready to cross Trump, so it's up to negotiations or the court system. That's gonna take weeks or months. Pay attention to the news. Unfortunately, I can't update during the day, and barely have time to read the news myself anyways. Good luck, sorry that I'm not more help.
CME_MINI:ES1!
by hungry_hippo
3
Weekly Market Forecast: Short Term Buys, Then Sells! In this video, we will analyze the S&P 500, NASDAQ, AND DOW JONES Futures for the week of April 7 - 11th. The Stock Market Indices may find support at current levels for a Bear Market Rally. Wait for the market structure shift to the upside before taking any buys. Let the market confirm it's intended direction first, then look for valid buy setups for a short term countertrend play. Enjoy! May profits be upon you. Leave any questions or comments in the comment section. I appreciate any feedback from my viewers! Like and/or subscribe if you want more accurate analysis. Thank you so much! Disclaimer: I do not provide personal investment advice and I am not a qualified licensed investment advisor. All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here. Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this channel, expressed or implied herein, are committed at your own risk, financial or otherwise.
CME_MINI:MES1!Long
by RT_Money
New World Order?Blue line would thrust us into a new paradigm as we are supposed to be in a ''bull cycle'' part of the big cycle established since 1945. According to my analysis, we shouldn't break 4300 for this recurring 5 years bull and 2 years bear cycles that have been happening for decades. So red line is the most expected outcome if things are to keep happening as usual. Either way, the FED put will save us all, so bid 4.5k or 2.7k you'll be fine in a 20-year time horizon.
CME_MINI:ES1!
by MarketsCreator
S&P 500 Futures Plunge: Bearish Dominance Unabated in MarketBearish/Bullish Trend Analysis Trend Condition: Bullish Trend Condition: 0 Bearish Trend Condition: 14 Analysis: The market remains strongly bearish as indicated by all 14 trend lines being red. There are no bullish trends present, suggesting persistent downward pressure. Price Action and Momentum Zones Closing Price and Change: The S&P 500 E-mini Futures closed at 4,902.50, down by 194.25 points (-3.81%). Daily Market Behavior: Today's sharp decline is consistent with the ongoing bearish trend, with no signs of a reversal or slowdown in the selling momentum. Momentum Zones: The market is trending downwards sharply, breaking past previous support levels, which may now act as resistance on any potential rebounds. Fibonacci Retracement Levels Current Position Relative to Levels: The index has fallen below the 50.00% Fibonacci retracement level and is approaching the 61.8% level. Key Fibonacci Levels: 23.6% → 5,584.26 38.2% → 5,385.65 50.0% → 5,144.15 61.8% → 4,903.11 Interpretation: The significant drop below the 50% level shows a robust continuation of the bearish trend, with the 61.80% level being the next critical marker to watch for potential support or further decline. Overall Market Interpretation The market's continued movement in a downward trajectory with all indicators pointing to a sustained bearish outlook suggests that investors remain cautious and are likely divesting, leading to the observed price declines. Summary Today’s significant downturn in the S&P 500 E-mini Futures highlights the ongoing bearish dominance in the market. With the index quickly approaching the 61.80% Fibonacci retracement level, it's crucial to watch for either a stabilization and potential buying opportunity or further declines if this level fails to hold. The lack of any bullish signals currently suggests that caution is warranted, and traders should prepare for possibly extended bearish conditions.
CME_MINI:ES1!Long
by traderspro_charts
S&P - Will we follow 2020/2021?The S&P has been trading in a rising pattern for over 700 days, similar to the rising pattern observed in 2020 and 2021. In that instance, the price of the S&P broke below the support trendline and lost all SMA support, while also making a lower low. This has not occurred since the start of the current pattern. Could a deeper correction follow? Blue line = 50-day MA Red line = 100-day MA Yellow line = 200-day MA Analysis of the 2020/2021 Price Action We can conclude the following five points: 1. The rising wedge lasted for nearly 700 days. 2. The price consistently made higher highs and higher lows. 3. The S&P found support on the SMAs and never broke below the 200-day MA. 4. After approximately 700 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low. 5. During the retest of the rising wedge and key SMAs (which had turned into resistance), a bearish cross (50-day SMA below the 100-day SMA) occurred, leading to a downtrend. How Does the 2020/2021 Price Action Correlate to 2023/2024? We can conclude the following five points: 1. The rising wedge lasted for approximately 750 days. 2. The price continued making higher highs and higher lows. 3. The S&P found support on the SMAs and never broke below the 200-day SMA. 4. After around 750 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low. 5. A bearish cross between the 50-day SMA and the 100-day SMA is currently forming. When we overlay the bar pattern of the 2021 bearish price action onto the current chart, it suggests that a revisit to 4,750 is possible. This level is both a technical support and the point where the S&P started its downtrend in 2021. Conclusion Will the S&P follow the 2021 price action, resulting in a sustained downtrend, or will it reclaim all lost SMA levels and continue its uptrend? The price action suggests that there is a real possibility of weakness in the coming months.
CME_MINI:ES1!
by Youriverse
8
Class A/B RSI Bearish Divergence on SPY Futures?Really posting here to see if anyone would validate this for me but I was looking on the chart and this idea came about. On the weekly chart for ES1!, there seems to be class A or B Bearish Divergence developing on the Weekly timeframe. Listen, of course we all know SPY trends upwards over time but is this an indicator of a larger sell the market needs to go higher every once in a blue moon? This is guarenteed a macro trend and I probably will have to wait a year for this analysis to play out but hey, at least we're here. (***ponders on how I charted Gamestop at $10 but never traded because of lack of knowledge***) Anyways, this is something I will of course monitor but let me highlight instances in history this has happened. Please feel free to give your input on this analysis! Jan 1998 thru Apr 2001 (News Driver: Dot-Com Bubble) Price makes higher highs from Jan 98' thru Mar 00' From Mar 98' thru Mar 00', the 3 peaks formed on the RSI leading to price establishing a lower high (SMT) on Sep 00'. Fails to make new all-time high From Sep 00' to Apr 01' price moves down as much as 30% over the next 224d Jan 2013 thru Feb 2016 Price makes higher highs from Jan 13' thru May 15' From May 13' thru Jun 14', the 3 peaks formed on the RSI leading to price establishing a lower high (SMT) Jul 15' and a following lower high on Nov 15' From Jul 15' to Aug 15' (42d) (News Driver: Lagging China Market) price moves down as much as 14% and as much as 14% on the Nov '15 lower high to Jan 16' (78d) (News Driver: Oil Prices) Current: Jan 24' thru Nov 24' Price has been making higher highs all year From Mar 24' thru , the RSI has been making lower highs while price is making higher highs We are now at a point where price is pushing to go higher but what I would want to see based off of historical data is for price to consolidate or some type of Bearish Turtle Soup forming. If this happens and the RSI returns to Fair Value, we could be in for a sizeable sell of for at least a couple of weeks in the near future. I will come back to this in the next few months. Happy Trading!
CME_MINI:ES1!
by EaszzzyE
Are We Witnessing a Black Swan Event?I’ve spent most of the day digging through charts and studying past crashes — because what we’re living through right now might be a once-in-a-decade opportunity. This current market crash feels eerily close to a black swan event. No one really expected Trump to push tariffs this far, and the consequences are already rippling through global markets. If this escalates into true economic isolation, the effects could be both tremendous and long-lasting. That said, there’s another possibility: This might just be a blip in history — a bold negotiating tactic that works out, shocks the system temporarily, and fades away. There’s even speculation this could mirror the 1989 crash, with some analysts warning of a potential 20% drop by Monday. If that happens, I’d rather not be frozen by fear. I want to act with intention. I want my plan in place and my orders ready. Before I share stock ideas I believe can outperform in the long run… Let’s first walk through what I believe might be playing out — at least for now. (Keep in mind, these theses can change fast.) Before the crash, it looked like a replay of 2022: Markets were clearly overvalued and due for a correction — back then, it was driven by regional bank failures, and the Fed quickly stepped in to stabilize things. But now, selling pressure is accelerating. This looks less like 2022 and more like 2020 — where markets broke down in response to a larger, fast-moving, global crisis. Even though we’re seeing similarities, things can shift very quickly. We still haven’t seen key reversal signs — like a Doji candle — and more importantly, there’s been no intervention yet from the government or global forces. Until that happens, panic may continue to snowball. And as we know from history, panic doesn’t operate on logic. Source: 📚 2020 Stock Market Crash en.wikipedia.org
CME_MINI:ES1!
by WallSt007
Combined US Indexes - Lower High Lower Low checked; What next...As previously expected, a lower low has been achieved. What was not expected was the speed, magnitude and extent of the fallout. Next up, since it is about 3.5 Standard Deviations out, we can start looking for a consolidation, although there might be slightly more downside and we need a higher low in the expected range within box. Having said that, it is possible to see it overextend downwards briefly. There is a long term support, Fibonacci downside target zone just below. So expecting a short term bounce between Monday to Wednesday at the earliest, and following that a consolidation area formation.
CME_MINI:ES1!
by Auguraltrader
ES and the Trade War, We are still short here.Current Market Context: Downtrend Continuation: The ongoing trade tensions between the U.S. and China have led to significant sell-offs, pushing the ES further down. The recent sharp decline in major indices, including the S&P 500, highlights the market's instability and investor anxiety. Bearish Sentiment: The market's bearish sentiment is evident, with the Nasdaq entering a bear market and the S&P 500 experiencing its largest weekly decline since 2020. Criteria for Reversal: Trend Line Break: A break above the current downtrend line on a higher time frame, such as the 15-minute chart, would be a strong indicator of a potential reversal. Mitigation of Bearish Fair Value Gap: Observing a mitigation of the bearish fair value gap would suggest that sellers are losing control, paving the way for buyers to step in. Formation of Bullish Fair Value Gap: The emergence of a bullish fair value gap would indicate a shift in market sentiment, signaling the potential for an uptrend. Projections for ES Price: Short-Term Outlook: If the above criteria are met, we could see a reversal in the ES price, with potential targets at key resistance levels. Look for a break above the recent highs on the 15-minute chart to confirm the uptrend. Medium-Term Outlook: Should the reversal gain momentum, the ES could aim for higher resistance levels, potentially retracing some of the recent losses. Key levels to watch include previous support turned resistance zones. Long-Term Outlook: In the event of sustained bullish momentum, driven by positive economic indicators or easing trade tensions, the ES could recover further, targeting higher time frame resistance levels. Strategic Considerations: Cautious Approach: Given the current volatility, it's crucial to remain cautious and wait for clear confirmation of a trend reversal before entering long positions. Sector Opportunities: Consider focusing on sectors like utilities, consumer staples, and healthcare, which may offer more stability during this downturn.
CME_MINI:ES1!Short
by CapitalGainz33
ES 3hr Update1) I told everyone not to go long until congress decides to rescind all of the tariffs 2) I said the futures gap might not fill for an extended period of time, but all gaps will fill. This one will not happen until the tariffs are rescinded by congress or the next president, lol. 3) I said like COVID, this drop will probably break a lot of rules. So far it's broken the gap rule, 3hr indicator, double index gap (SPX daily index doesn't usually throw gaps 2 days in a row, and if it does it fills them them within days). 4) I assume it will break daily and weekly indicators as well, so I'm not even gonna post plots. 5) The algos are on, but broken. You can see that the market zig zagged multiple times today as the algos tried to pump the market, but there were way too many retail investors that sold. EOD (end of day) selling indicates people going cash in their 401k. Extremely rare for the market to drop EOD on Fridays like that. Usually there's at least some bounce. Anyways, you can see 3hr indicators flatlined at the bottom, the same can happen with daily and weekly indicators. We were close to circuit breaker level today. We may hit it next week if congress doesn't do something. That's the unknown factor that kept me from shorting the market over the weekend. If not, we may see yet another futures gap Sunday night and the circuit breaker. Remember we hit it multiple times during COVID bottom.
CME_MINI:ES1!
by hungry_hippo
2
ES Monthly chart for some of you youngstersIf you think the market can't go any lower, you're mistaken. It's been a while since it's happened (housing bubble crash), but monthly indicators can go oversold. We're not there yet. If congress doesn't step in and rescind the tariffs, the stock market will get cut in half like it did back then. It's gonna be nearly impossible for corporations to match even preCOVID level profits with such huge tariffs. I do not recommend going long on anything until congress steps in. That may happen as early as this weekend, or they can wait until the market tanks 50%, lol..... who knows.
CME_MINI:ES1!
by hungry_hippo
7