E-mini S&P 500 Futures Update: Keep It Simple Stupid Series (No
changes)
Today’s session was fairly straight forward; it had a high possibility
of being a consolidation range bound day also known as a shakefest. It was
confirmed to be a shakefest by 11AM and that’s when we left our office. The
consolidation day provided two key things, it let the moving averages catch up
on all timeframes and to trap more traders in from both sides. Currently, 1HR
50SMA is pretty much the same as the 1HR 8EMA+20EMA. The day session’s range
was only 8 points, 2059.5 low vs 2067.5 high.
What’s next?
There’s 4 sessions left for the monthly candle closing.
Daily closed at 2062.75, this is the third consecutive close above the
daily 200SMA.
Targets: As long as the bull train remains above 2050, the immediate
targets are 2089.5, 2100 and 2107.
(We made a minor mistake in Thursday’s update, the August high is
ES 2107 not 2103.75)
For bears: Monday/early next week needs to get back below 2054 the daily 200SMA
as soon as possible and onto the trending daily 8EMA currently at 2042.3.
Breaks below 2050, then the immediate targets are 2042 and 2030
Obviously, the market could just consolidate in a tight range and wait
for the Wednesday Oct 28 FOMC announcement as it burns off more premiums in
options and it lets the moving averages catch up. (Tomorrow, there’s AAPL
earnings after the close)
Roadmap and thoughts:
Generally speaking, from trading various instruments over the years
we’ve noticed that when a retracement on a daily chart closes above/below 78.6%
then a full retracement to the 100% becomes very likely eventually. However, we
do not have the relevant backtest system to prove this in a statistical manner.
Bulls really need to close above 2069.16/2070.
The first try at Daily 20EMA is a BTFD setup
Even if bears manage to reverse next week or within these two weeks;
daily bulls have a first try BTFD setup at daily 20EMA setup just like how
first try hourly 20EMA was a BTFD setup during Friday’s day session. We count
this rally from the 1861 vs 1861.5 hourly bottom to 2065 as Leg 1. The bounce
has never had to retest the daily 20EMA yet, but retested the daily 8EMA 3
times and bounced off it. This means it has been a massive bull squeeze run
that the very first dip to 20EMA should sticksave. However, just because first
try BTFD at daily 20EMA is a great setup ,it does not mean it has to be a daily
chart scale bounce (50-100 points). It could just be an intraday 20-30 points
bounce then retest the daily 20EMA again if bears manage to have that much
conviction.
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Our Swing Position
- Nothing has changed
Total = 20% swing shorts (Dec Monthly ITM Puts)
