Article #19 Forecasting the S&P500 emini 5min chart

This blog will review the MarketWarrior 5 forecast for the S&P500 E-mini for Monday July 6, 2015. I will be discussing the 5 minute chart. The data used comes from the DTN IQFeed subscription using the symbol @ES#, which is the nearby S&P500 E-mini contract. The following top chart shows the E-mini through 9:10 AM ET. The main trading session opens at 9:30 AM ET. I will usually recalculate the forecast for the E-mini a few minutes before the main trading session opens. In this case I recalculated the forecast at 9:10 AM ET. The forecast does not have any user settings; it just requires a single button click.

When a forecast is made, there is a way to see if the forecast has a higher than normal probability of success. If the most recent three Change-In-Trend (CIT) points in the MarketWarrior cycle line and the E-mini are accurately aligned, then the forecast has a much better chance to accurately forecast the day’s price action. The reason for this is that when the most recent three historical CIT points are accurately aligned, it indicates MarketWarrior has correctly calculated the cycle and the forecast should be accurate. On the chart below, I have added the large red numbers 1, 2, 3 and 4. These are identifying the four most recent historical CIT points when the forecast was made at 9:10 AM ET. These four CIT points in the MarketWarrior cycle and the CIT points in the E-mini have a close alignment based on both price and time. This indicates the cycle is calculated accurately and the forecast for the rest of the day should be accurate.

The forecast for the rest of the day shows four CIT points. First is a Top at 11:10 AM ET at the price 2054.19. Then a Bottom at 12:25 PM ET at the price 2058.84. Then a Top at 13:30(1:30) PM ET. Finally the fourth point is a Bottom at 14:50(2:50) PM ET. The high of the day is forecast CIT #1 at 11:10 AM ET and the low of the day is forecast CIT #4 at 14:50(2:50) PM ET.


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The chart below shows the 5 minute price data after the main trading session has ended. You can see the basic pattern in the forecast was also the pattern made by the E-mini. The forecast had a rally to 11:10 AM ET and the E-mini actually rallied to a top at 10:45 AM ET. The second forecast CIT was for a bottom at 12:25 PM ET. At this time a E-mini top occurred. So this was an accurate forecast for the CIT time but the CIT type(top or bottom) was wrong. When making forecasts based on market cycles, this will sometimes happen. The third CIT was for a top at 13:30(1:30) PM ET and this CIT did not occur in the E-mini. The final CIT was forecast for 14:50(2:50) PM ET and was a bottom. The E-mini made a bottom at 14:40(2:40) PM ET. The E-mini then rallied to the end of the chart as indicated in the forecast.

This shows the forecast was calculated one time at 9:10 AM ET and correctly forecast the overall pattern for the day, three of four forecast CIT points aligned to an E-mini CIT and the forecast correctly identified the location of the high and low of the day at forecast CIT #1 and forecast CIT #4.  Look over the chart below and if you think the forecast below would help you trade the E-mini. There is a free trial for both MarketWarrior 5 and DTN IQFeed. You can click here to learn more.


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