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Chart Analysis and News for the Futures Market: Week of 01-15-2017

 

The S&P EMini 500 posted an inverted pinbar (a rejection pattern) last week and traded below the resistance at 2280 and the support at 2260 with a strong rejection of a mid-week sell-off attempt. Good US data and boosted retail sales numbers helped the S&P maintain the highs. Mid-week, traders were disappointed with Trump’s speech for not addressing his spending and stimulus plans. The following analysis is the Opinion of Optimus Futures, LLC.

Technically, the S&P 500 EMini is trapped in a narrow range and waiting for a catalyst. Markets are closed on Monday in the US but it will be a busy week afterwards with lots of news items on the calendar. Trump’s inauguration is next week on Thursday and traders will listen closely to what he has to say.

E-mini SP Chart

The 30-year US Treasury closed slightly higher and yields were lower. Remember, price and yields move inversely. The uncertainty about Trump’s policies and the high valuations are still weighing on Treasury yields.

The positive retail sales data acted as a short term catalyst and helped it climb higher. Similarly to the S&P 500 Emini, Treasuries traded in a narrow range last week. Next week, with Trumps inauguration, markets should see more volatility. CPI data on Wednesday and multiple FED and FOMC appearances during the week are usually also big movers for Treasuries.

30-year US Treasury Bond Futures

The US Dollar  sold off for the 3rd week in a row and weaker Chinese trade data added to the Greenback’s bearishness. As mentioned before, Trump did not address his stimulus program during last week’s speech which the markets took as bearish for the US Dollar. Analysts still see the US Dollar higher for the year but a lower likelihood of immediate interest rate hikes weighted on the US Dollar.

The Dollar is approaching the psychologically important 100 support level. Last time we saw a strong overreaction followed by a rejection. This week’s CPI data along with Yellen’s appearances will probably add a lot of volatility to the Dollar.

US Dollar Dollar Index Futures

Gold moves with a high negative correlation to the US-Dollar and Gold posted its 3rd week of consecutive gains as uncertainty rises again. Price found resistance at the 1200 level last week but the weekly price action confirms a high level of bullish momentum.

Clearly, Gold is driven by intermarket correlations between the equity indexes and the US Dollar. Thus, Gold traders have to keep an eye on those markets going into the next week. From a technical view, there are the 1240 and the 1200 resistance above current price and 1180 is the next short term support below price action.

Gold Futures

Crude oil closed significantly lower on the week but recovered some of the early week’s losses. Crude oil traders are awaiting proof that producers are following through on the production cuts. From a price perspective, there are still some doubts how the OPEC deal is being carried out. Analysts put a lot of weight on the monthly production data which will clearly show how production has developed since the OPEC deal.

Crude oil, like many other asset classes the week, is trading in a narrow range between the resistance at $55/56 and support at $50. Without a catalyst, it’s likely to see price continue its range bound price action. If more doubts about the OPEC deal arise, we could even see a further drop below $50.

Crude Oil Futures

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Asymmetric Risk and Return Payouts in your Trading

 

A good trading system should be designed to achieve asymmetric returns by analyzing the potential outcome of a trade and only triggering those trades where the odds are skewed in your favor using asymmetric risk and return profiles. Asymmetry is one of the variables of a trading system with potential positive expectancy, and the ability to identify trades where the probability of a positive outcome is greater than the negative is essential to a good trading strategy. This article will explore the important aspects that can help you integrate asymmetric concepts into your own futures trading strategy.

 

What is an asymmetric risk and return profile?

Asymmetric risk and return means that the payout of a profitable trade is significantly larger than the potential loss. It also suggests that a trader needs to control

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Chart Analysis and News for the Futures Market: Week of 01-08-2017

 

The S&P is trading at 17 times expected earnings, significantly higher than the 10 year average of 14. Last week, there were 24 new 52 week highs and no new lows. The Dow Jones only came a few points short of the historic 20,000 price level, and the E-Mini pushed back above 2270, closing at the highest level ever observed. Although last week’s US job data was mixed, average hourly wages showed a steady rise, indicating that the US economy is on the right track. The positive development will reassure the FED that their decision to raise rates in December was the right one and it will give confidence for more rate hikes in 2017. The analysis below is the opinion of Optimus Futures.

Despite the selloff two weeks ago, the

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Bookmap Trading Platform: Review and Interview

 

Tsachi Galanos, CEO of Bookmap, talks to Matt Zimberg, CEO of Optimus Futures, to discuss the Bookmap Trading Software.

What is your personal background and how did you end up with developing Bookmap?

Tsachi: I have over eight years of experience in the financial services industry. In the beginning, I dealt with automated trading strategies and trading systems, including HFT. Roughly two years ago VeloxPro, the company I manage, shifted its focus from proprietary trading activity (mainly algorithmic HFT), to developing an Order Book visualization platform. We named our platform Bookmap (stands for order BOOK and heat MAP).

The reasoning behind the development of Bookmap was the need for a more advanced analysis tool for our HFT activity. Sergey, my partner, and I wanted to visualize the orders we sent to

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The Wave Principle in the E Mini S&P – A Year in Review

 

The start of a new trading year can be a very good time to learn new things as well as revisit some of the old in our study of the markets. With an 85th birthday this year, let’s take a look at The Wave Principle.

The Wave Principle was first discovered by Ralph Nelson Elliott in the mid 1930’s. It was reintroduced in the 1970’s and is collectively known as Elliott Waves these days. It is also referred to as an Elliott Wave principle, theory or model, but as Shakespeare wrote, “ a rose by any other name would still smell as sweet.”

As Ralph Elliott wrote in his blue-binder, hand typed copies of The Wave Principle in 1932, “ The Wave Principle makes no errors, only the interpretation of The Wave

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