After a 6 week rally, the S&P 500 futures (ESZ19:CME) closed on new all time highs once again. A combination of the weekly options expiration, mid-month rebalancing, low volume and the fed’s QE4 all played its roll on Friday.
I don’t care what anyone says, I remember how the markets acted through all the quantitative easing programs and how the ES went up and up, and thats what its doing now. I know many traders were banking on getting a trade deal and selling Friday’s gap up open. It did sell off a bit, but then it came ‘roaring’ back up to close on its high. Personally, I think the ES is long overdue for a pullback, but I just don’t know when it’s going to come.
Over three weeks ago I said a big rip was coming and pointed out 3110, 3120 and 3150. The ES has hit the first two objectives, but my gut tells me 3150 may not come as quickly as 3110 and 3120. The futures are up 264.25 handles from its October 3, 2855 low in 32 trading sessions. It’s totally off the hook!
Our view; when the deal comes the ES will sell off, but I just do not know when it’s going to come. I don’t remember seeing anything like this! Our lean is to sell the early rallies and buy weakness with tight stops, especially if the volume is low. Something is going to happen this week and my guess is the ES setting up for a sell off.
As always, please use protective buy and sell stops when trading futures and options.
Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Decisions to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
No responses yet