Forecast on Index Futures

A look at the Emini S&P – special edition

Emini S&P Analysis & trade plan

Nov 7th 2016 Updated at 10:34 pm EDT on Nov 6th 2016

For Friday Nov 4th – I’d offered the following analysis “We have critical support in the 2080~2078 area for today as we gather the tics in an oversold market resulting primarily from uncertainty in the general elections. If we held this resistance we would likely jump up some 10 points to the 2088~2092 range and continue on to better resistance in the 2097 area. Above here, would perhaps be a stretch as bullish participants appear dormant and we could see intraday highs here.”  We mounted this painstaking grind up to 2094 and yet again, sold off in what appeared to be re-validation of that support area 2080~78. In fact – we halted right about here into the cash close.

For today the ES has gapped higher to some decent resistance in the 2106~2110 area early this morning. We are likely to continue higher here and will target the 2115 area relatively quickly before any gap cover move and then perhaps run into a wall of good resistance at 2121~2125 zone. I am betting this is the best chance of the rally taking us on news for today, but if you are attempting shorts – please don’t keep your stops too much beyond 2128 on the likelihood of getting stopped out if placed closer.

The downside is tough to predict today, but once the cash market opens and we fail to persist in the current area of 2108, we will likely fall to 2105 in an attempt to cover that gap and find decent support at 2100 or even 2095. If we continue lower where bullish participants elect to just wait it out until Tuesday night, we may slide back into the 2086 and find excellent support at 2080. In the outside chance that we break lower today (which could only happen with some crazy unknown poll number that people begin to recognize in the next 24 hours, we could head to 2065 and then crest at 2060~2056. This is my best guess for any gap cover move below. Stops need to be a bit wider (say around 2040) here as the downside, although a gamble of sorts isn’t totally out of question and a sustained break below is therefore an important sell signal will have us heading back initially to 2027, then 2018~2011 and as far down as 2000 the psychological barrier for this market.

Cam Pivots for Nov 7th, 2016

R3=2095 | R2=2088 || R1=2084 | S1=2076.5 || S2=2071.50 | S3= 2064.5

News related to the index futures

Nov 7th 2016 Updated at 10:34 pm EDT on Nov 6th 2016

December E-mini S&P 500 Index futures gapped higher on the opening in reaction to the news that the FBI was dropping the investigation into Hillary Clinton’s emails and that no new charges were pending. Asian portfolio managers, who hedged positions last week, covered their short positions on the opening, triggering the gap trade. After opening at 2106.00, the index moved as high as 2111.00 before settling into a range. The decision today for U.S. investors will be whether to chase this market higher or wait for a pullback. There is still risk with the election on Tuesday so if there is buying today, I don’t think it will be aggressive enough to change the trend to up. On the day the recent FBI news broke, the index settled at 2123.75. That may be all we can expect to see over the next two days.

Volume is expected to be below average so don’t get caught buying strength and selling weakness. I think this is going to be a good day to let the market come to you.

Emini S&P (ES) Weekly Chart Analysis



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