Category Archives: E-Mini S&P 500

“Risk-Off” – Overdone?


Written by: Pauly @SPZ_Trader

Since last Friday’s bombshell announcement by FBI head Comey advising a further look into Hillary Clinton’s email issue the markets have been on a “Risk-Off” ride that has continued to gain momentum with nary a sign of slowing down.

How things change so quickly. Last week the dollar was riding high, and equities could not make up their mind whether to stand pat or rally into an expected Clinton victory.  I would argue at the time the dollar was way overdone to the upside and conversely the Euro extremely oversold due to new positioning. We all heard about Euro 105.   Gold was holding its own constantly flirting with the 200ma around 1265.

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Don’t Forget the Bigger Picture

In the past, I used to be so hyper focused on the short term action in the market that I would completely forget about what’s happening in the bigger picture.  I’d want to be short or long based off of short term action and completely forget or even ignore what the bigger picture trend is.

Traders, including myself, can have a tenancy to micromanage their trades and ignore what’s happening on the longer term.  That was a major weakness of mine and it cost me greatly at the beginning of my career.  Once I started to take more time in my preparation it started to spill over in my trading.

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Breakdown of Divergence Creates Clean ES/NQ Trades

This morning on Twitter and in our member area I spoke about the divergence going on between Biotech & Energy.  Biotech was leading the Nasdaq higher while Energy was the weakest sector in the ES (S&P), keeping the ES at the bottom or middle part of their range.

When we see divergence in sectors, this tends to keep the ES in a range bound scenario until one of the leading divergence markets reverses and works with the other market.  The key for us is to watch our Beacon strategy to see if we get alerts at the same time.  If we get an alert at the same time, that is confirmation that both the NQ and ES are hitting resistance at the same time.  This is the type of trade we will look for because it confirms that they may work together and get away from being divergent.

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Trading Futures During Earnings Season – Trade Setups 7.19.16

This morning we were focusing on the ES, YM, and NQ.  2152 in ES, 18,443 in YM, & 4597 in NQ.  As I have mentioned many times before in my posts, I use bigger picture support and resistance lines for my bias and short term charts to execute those biases.  This morning we had some divergence with the Nasdaq trading the weakest, the Dow trading the strongest, and the ES right in the middle.

Not a surprise to see divergence among the Indices during earnings season.  Typically during earnings season traders can get chopped up because of divergences.  From years of getting myself chopped up in these types of markets I’ve learned to stay small and watch to see how the other markets react when one of the other markets gets stronger or weaker.

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Why You Should Trade More Than One Market – Trade Setups 6.21.16

In this morning’s brief to our traders I discussed the strong possibility of an equities market that remained sideways between our indicator’s 60 minute pink and orange levels (see chart).  ES & NQ were coming up just shy of testing our levels, but the YM (Dow) had reached our pink resistance level, then triggered a short on our strategy.  

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Trading a Strategy Pays… Opinions Don’t – Trade Setups 6.14.16

This morning we were bullish the ES coming into the open, but were unable to execute a long trade. I’ve said many times before, I am a risk manager more than a trader. I can’t react off of every bias based on where the market could go. I have to have a strategy in place to execute my bias. One of the hardest things to do as a trader is to watch the market go your way when you are not in the trade.

In this business you will catch some trades and you will miss some trades, but if you don’t have a strategy, then you are closer to exiting the business than growing in the business. Because we were patient and followed our strategy we got a pullback to buy in the Dow @YM. It wasn’t the market we wanted to be in because we mostly trade ES, but since the YM retraced further to our support area and the risk made sense, that was the trade we had the option to take.

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