5 Minute Forecasts for S&P500 and NIFTY 50

In this blog I am going to show how to use MarketWarrior 5’s automatic forecasting tool for the 5 minute chart. I am going to be using the S&P500 symbol from Google Finance, LNX. I will also be using the NIFTY50 symbol $SPIR from Barchart.com. The forecasting tool we are using is applied to a price chart by clicking the button labeled ‘5/60Min Forecast’. This is show in the first picture below. The blog will cover July 20th to 24th.

JULY 20, 2017

The picture below shows the 5 minute chart for the S&P500 using the symbol LNX. This S&P500 symbol has data from 9:30AM when the main trading session opens in the US to 3:59PM when the main trading session closes. The MarketWarrior 5 automatic forecasting tool has been applied to the chart below. The forecast can be recalculated as often as you want or not at all. When I use this forecasting tool I do not recalculate very often, usually from zero to two times a day and that is all.

On the chart below I have added the forecasting tool at 9:55AM on July 20, 2017. I have added a blue vertical line marking the time 9:55AM when the forecast was made. I usually select a time close to 10:00 AM because I want the opening gap and the first few bars to be included in the forecast calculation. The forecasting tool is converting the recent price action into a cycle and is then extending the cycle forward.

On the chart below you can see the price action for July 19, 2017 was upward sloping with almost know counter-trend declines. This usually results in the next days forecast showing a strong up move. This is what happened on July 20, 2017, the forecast made in the morning at 9:55AM was a strong up move.

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The next chart shows the 5 minute chart about half way through the day. The price action did not follow the forecast and there was no trade to be made. When I am recalculating a forecast I only do it a few times a day. If the forecast is wrong and the market is not following then there is nothing to trade. I like to recalculate a forecast half-way through a trading day for the market I am looking at. In this case between 12:30PM and 1:00PM represents halfway through the trading day. The chart below shows the errant forecast with the price data through 12:55PM. On the next chart I am going to recalculate the forecast.

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The picture below still shows July 20, 2017 and I have now recalculated the forecast at 12:55PM. The new forecast shows the remainder of the trading day which is three hours from 1:00PM to 3:59PM. There are now four forecast turning points. Two bottoms and two tops.

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The final two charts show how this worked out in the second half of the day. The pattern of two bottoms and two tops with a decline into the end of the main trading session did in fact occur. The forecast for the second half of the day was accurate. The green indicator in the sub-chart is the ‘Stochastic of RSI’ which is one of the better momentum indicators for small time frame charts such as 5 minute charts.

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The final picture below shows the forecast line with no top and bottom markers so it can be seen clearly. When the forecast line shows a bottom and the Stochastic of RSI is over sold it is a buy signal. When the forecast line is showing a top and the Stochastic of RSI is over bought it is a sell signal.

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JULY 21, 2017

The picture below shows the Google Finance symbol LNX for the S&P500. This is a 5 minute chart and is a continuation of the chart above. On July 21, 2017 I waited for the main trading session to open to see the opening gap and then calculated the forecast at the same time seen in the previous example which was 9:55AM. I have added a blue vertical line making 9:55AM. The forecast tool calculates a cycle from the recent historical data and then extends the cycle forward as the red line.

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The green line in the sub-chart is the Stochastic of RSI indicator. The red forecast line is above the actual price data for July 21, 2017 but the pattern is correct. On this day no recalculation was necessary. The forecast turning points were close to market turning points. The forecast pattern, trend and direction were similar to the actual market.

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JULY 24, 2017

Below is an example for the S&P500 using the Google Finance symbol LNX. The chart is again a 5 minute chart. I am going to apply the same procedure to using the forecast line. On July 24, 2017 I waited to see the opening gap and allowed a few bars to form. I added the forecast indicator at 9:55AM just before 10:00AM. The forecast line is the red line that extends to the end of the day.

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It was apparent by 11:00AM the forecast was errant and was not aligning to the S&P500 price movements. I waited until the middle of the day to recalculate the chart. Recalculating at the middle of the trading day usually generates good results but you can recalculate at any time.

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The picture below shows the forecast after I recalculated it at 12:55PM. This is the same time I recalculated in the previous July 20, 2017 example. Using a starting calculation at 9:55AM and a recalculation time, if it is needed, at 12:55AM seems to work well for the S&P500 chart. The green line in the sub-chart is the ‘Stochastic of RSI’ indicator which works well on the S&P500, 5 minute chart.

When the forecast line shows a bottom and the Stochastic of RSI is over sold it is a buy signal. When the forecast line is showing a top and the Stochastic of RSI is over bought it is a sell signal.

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Below is the final chart for the July 24, 2017 S&P500. The forecast line for the second half of the day shows a rally for most of the time from 1:00PM to 3:59PM with a decline at the end of the day. The red forecast line shows a price swing from low to high that is larger than the actual price swing but the pattern, trend and direction is correct.

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JULY 21, 2017 – NIFTY 50 symbol $SPIR

The two pictures below show an example for using the forecast tool on the 5 minute chart for the Indian stock index NIFTY 50. This chart is using the Barchart.com symbol $SPIR. This symbol trades almost 24 hours a day but there is a main trading session that runs from 9:00AM to 3:59PM.

On the chart below I calculated the forecast just after the main trading session opened at 9:05AM. I have added a blue vertical line marking the time when the forecast was calculated. The forecasting tool is calculating a cycle from the recent historical data and then it is extending the cycle into the future.

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Below is the same forecast as above, but now with the data through the end of the main trading session. This forecast was accurate enough that I would not have recalculated the forecast during the day. I do not trade the NIFTY 50 but I will try to get more examples showing the forecast tool with the NIFTY 50 because we get a lot of requests for showing this index.

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New Retracement Indicators

MarketWarrior 5.2017.6.16 has added two retracement indicators. These are named ‘ABC Retrace’ and ‘AB Retrace’. The upgrade for the new version can be downloaded in the MW 5 owner’s page.

The picture below shows the ‘ABC Retrace’ indicator. This indicator will draw two lines connecting three change-in-trend points. The indicator will then drawn retracement lines. The retracement calculation can be made based on the size of the AB line or the BC line.

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Below is a picture of the ‘AB Retrace’ indicator. This indicator draws a line between two points and then drawns retracement price levels.

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Yahoo Data

The company Yahoo Inc. is being sold to the cell phone company Verizon.  Yahoo Finance has turned off access to all free historical data. We are looking for an alternative data source. As of right now there is no more free historical data from Yahoo Finance.  I believe the data from Google is still available in MarketWarrior 5.

 

Automatic Forecasts for Commodities

The Master Time Factor automatic forecasts are now available for daily commodity charts. The automatic forecasts have been available for the S&P500 ES futures contracts and now they are available for the following 22 futures: 1)Cocoa  2)Coffee  3)Copper  4)Corn  5)Cotton  6)Crude Oil  7)Feeder Cattle  8)Gasoline  9)Gold  10)Heating Oil  11)Lean Hogs  12)Live Cattle  13)Natural Gas  14)Orange Juice  15)Palladium  16)Platinum  17)Silver  18)Soybeans  19)Soybean Meal  20)Soybean Oil  21)Sugar11 and  22)Wheat. This indicator is now available in MarketWarrior 5.2016.7.5. The free trial is available for download here.

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Million Dollar Pivot Finder

The picture below is shows the 5 minute S&P500 emini contract. This is the September contract. The MarketWarrior 5 indicator Million Dollar Pivot Finder (MDPF) is applied to this chart. This is a zero delay indicator that identifies a change-in-trend. The triangles with the B in the center identify bottom CIT. The triangles with a T in the center identify market tops. These triangles do not move once they appear. The MDPF is now available in MarkletWarrior 5.2016.6.2.

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Article #25 S&P500 E-mini Forecast Review

There were almost no Change-In-Trend(CIT) points in the overnight market on August 5, 2015. This always makes it harder for MarketWarrior 5 to calculate the cycle that is operating on the 5 minute chart for the E-mini. On August 5 the overnight market basically sloped up with only two minor CIT. When I am forecasting the E-mini, I like to make the first calculation for the 5 minute forecast before the main trading session opens at 9:30 AM ET. On the chart below, I have calculated the forecast at 9:15 AM ET. I am using the DTN IQFeed and the continuous future symbol @ES#.

There are two main sections to this forecast. The first is a forecast bottom at 10:05 AM ET;  the second is a rally up to a double top pattern. The double tops occur about one hour apart at 11:40 AM ET and 12:45 PM ET. I have drawn a red arrow labeled A to mark this rally.

The second part of the forecast is a decline after the 12:45 PM ET forecast top. After this forecast top, the 5 minute forecast declines for the rest of the day. I have drawn a blue line labeled B, which identifies this decline.

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The chart below shows the pattern made by the E-mini on August 5, 2015. The forecast pattern was correct, but the E-mini made the pattern approximately one hour earlier than forecast. The red line labeled A1 shows the first rally of the day. This rally ran from 9:20 AM ET to 10:30 AM ET. The forecast shows a rally from 10:05 AM ET to 11:40 AM ET.

The E-mini made a double top at 10:30 AM ET and 11:25 AM ET. The forecast shows a double top at 11:40 AM ET and 12:45 PM ET.

The E-mini then declined after the top at 11:25 AM ET. For this day, August 5, 2015, the forecast pattern for the 5 minute E-mini was correct but it was offset from the actual E-mini price action by approximately one hour.

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Article #24 S&P500 E-mini Forecast Review

Here is a review of the forecast made by the MarketWarrior 5 program for the 5 minute chart of the S&P500 E-mini on Tuesday August 4, 2015. I am using the DTN IQFeed as a data source. The symbol used is @ES#, which is the continuous E-mini symbol. I had a late start on August 4 and did not begin until after the main trading session opened. The chart below shows the forecast that I calculated at 10:10 AM ET. The main trading session opens at 9:30 AM ET.

There were only three Change-In-Trend (CIT) forecast points for August 4, 2015.  There was a forecast top just a few minutes ahead at 10:30 AM ET at the price 2094.44, then a bottom at 11:00 AM ET at 2089.90. Finally a top was forecast for 13:55(1:55) PM ET.

This forecast looked very good because the over night session had large tops and bottoms that could be used by MarketWarrior to calculate the E-mini cycle. When the overnight session is flat, calculating the market cycle can be difficult, but on August 4 there seemed to be a good amount of volatility in the over night market. The second chart shows what happened during the day.

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On the chart below, I have labeled the three forecast CIT points as A, B and C. The forecast top at 10:30 AM ET was very accurate in both price and time. The actual top came at 10:25 AM ET. This is labeled A.  The forecast labeled B was for a bottom at 11:00 AM ET and again this was very accurate.  The actual bottom came at 10:55 AM ET. The third forecast CIT, labeled C, was for a top at 13:55(1:55) PM ET. The actual top came early at 13:30(1:30) PM ET. On the chart below, I have drawn a red arrow connecting the forecast top C and the actual top in the E-mini. After the top at C, the market followed the forecast pattern and declined for the rest of the main trading session.  If you think this forecast would help you trade the E-mini there is a free trial for both MarketWarrior 5 and DTN IQFeed. You can click here and here to learn more.

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Advanced Use of The MarketWarrior E-mini Forecast

This article is a review of the forecast made by MarketWarrior for the 5 minute S&P500 E-mini contract for Tuesday July 21, 2015. This article uses the word advanced in the title because I am going to describe the analysis I went through during the day to make the decision to recalculate the forecast during the main E-mini trading session. In past forecast reviews, I have calculated the forecast one time as the start of the main trading session approached and then let the forecast stand without change so readers could see how the forecast worked. There are many cases when I decide to recalculate the forecast during the main trading session, so I am going to start writing about the more advanced use of the MarketWarrior E-mini forecast.

The main trading session starts for the E-mini at 9:30 AM ET. As the main trading session approaches, I usually calculate the forecast. I calculate the forecast before the main trading session starts, because the volatile price action at the open often provides a misleading indication of the current day’s cycle. Therefore I try to get a cycle calculation before the main trading session opens. On Tuesday July 21, 2015 at 9:10 AM ET, I calculated the E-mini forecast. This forecast is shown below. On this chart I have manually drawn a red arrow pointing up and labeled A. This arrow shows the direction of the forecast culminating in a forecast top at 9:20 AM ET. The second red arrow points down and is labeled B. This shows the direction of the actual price action. You can see the forecast and the actual E-mini price are already diverging even though the forecast has just been made. This is telling us the forecast was not able to accurately calculate the E-mini cycle and a problem exists. Because of this divergence between the forecast and the E-mini, I decided to take a wait and see approach.

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The picture below was taken at 9:55 AM ET and it shows the same forecast seen above. I have manually added a blue dotted line at the forecast top 9:20 AM ET. You can see the top forecast time was the exact time for an E-mini bottom. This E-mini bottom at 9:20 AM ET adds one extra change-in-trend point for MarketWarrior to calculate a more accurate forecast for the rest of the trading day.

On the chart below, I have also added two brown lines. The first brown line connects the forecast tops and is labeled 1. The second line connects the forecast bottoms and is labeled 2. These two brown lines make a low volatility sideways wedge pattern for almost the whole main trading session. This pattern would be unusual for the E-mini, which usually has more price movement than is indicated by this forecast. Because of these two factors, the new bottom CIT at 9:20 AM and the unusual low volatility in the forecast, I decided to recalculate the forecast.

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I recalculated the forecast just before 10:00 AM ET and the new cycle forecast is seen below. This forecast has a normal amount of price volatility with a forecast decline down to a bottom at 14:35(2:35) PM ET at the price 2105. The forecast also shows a main trading session with two main swings. First is a decline to 14:35(2:35) PM ET and then a rally to the end of the main trading session. The main trading session ends at 4:14:59 PM ET when the CME Group closes E-mini trading and reopens at 4:30 PM ET. This 15 minute close in trading ends the main trading session. The forecast pattern seen below with two main swings is fairly common in the E-mini as traders will push the market in one direction most of the day but then try to take profits in the last one or two hours.

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The picture below shows the same forecast as seen above after the main trading session has ended. The E-mini fell into the 2 PM hour (14:00) and then rallied to the end of the day. The recalculated forecast for the E-mini was in fact the correct cycle forecast for July 21, 2015. By recalculating the forecast at 10 AM ET, MarketWarrior was able to make a much more accurate forecast for the rest of the day. I will be writing more advanced articles about the process I go through when making the decision to recalculate the forecast. The large drop seen at the end of the chart occurred at 4:30 PM ET after the market reopened. Look over the chart below and if you think this forecast would help you trade the E-mini, there is a free trial for both MarketWarrior 5 and DTN IQFeed. You can click here and here to learn more.

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Article #22 Forecasting the S&P500 emini 5min chart

The charts below shows a review for the automatic MarketWarrior E-mini forecast for Monday July 13, 2015. The E-mini main trading session opens at 9:30 AM ET and I usually calculate the forecast for the day as the open approaches. I usually do not recalculate the forecast during the day but you have the option to recalculate a forecast at any time. The chart below uses the DTN IQFeed. At 9:15 AM ET I calculated the forecast seen below. The forecast covers the main E-mini trading session on July 13, 2015.

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The forecast showed a rally up to 10:05 AM ET. The actual E-mini prices rallied until 10:20 AM ET. The forecast then shows a decline until 12:25 PM ET. The actual E-mini declined until 12:55 PM ET. The forecast then showed a sideways move that ended with a top at 14:05(2:05) PM ET. The E-mini followed this path to 14:05(2:05) PM ET. After 14:05(2:05) PM ET, the forecast showed a decline and the E-mini rallied. So the last two hours of the trading day saw the forecast and the E-mini diverge.

When the forecast and the E-mini diverge, I would normally recalculate the forecast, but in this case I used just one forecast calculated at 9:15 AM ET for the whole day. In a future example, I will show a situation when I recalculated the forecast. In this case on July 13, 2015, the forecast was accurate from 9:15 AM ET to 14:05(2:05) PM ET. Look over the chart below and if you think this forecast would help you trade the E-mini, there is a free trial for both MarketWarrior 5 and DTN IQFeed. You can click here and here to learn more.

ES5Forecast_July13_Second

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Article #21 Forecasting the S&P500 emini 5min chart

Here is a review of the MarketWarrior forecast on the E-mini 5 minute chart for July 10, 2015. The chart below is created with the DTN IQFeed using the symbol @ES#. This symbol is the nearby E-mini contract, so you need to check which contract is currently the nearby before trading. The current nearby is the September 2015 contract.

When I use the automatic forecasting module in MarketWarrior 5, I usually identify the time period I want to trade, and then calculate the forecast as that time period approaches. The only two time periods I trade in the E-mini are the overnight period from 1:00 AM ET – 4:00 AM ET which correlates to the Shanghai exchange, and then the main trading session in the US which starts at 9:30 AM ET. On the chart below, at 9:10 AM ET leading up to the start of the main trading session, I calculated the forecasts for the 5 minute chart.

The forecast is the thin red and green line. The top arrows identify the forecast top Change-In-Trend(CIT) based on price and time. The bottom arrows identify the forecast bottom CIT based on price and time. One important part of the forecast is simply the overall pattern in the forecast. In the forecast below, there are two parts. A decline until 11:00 AM ET and then a rally through the rest of the day.

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The chart below shows the same forecast as above, but now the 5 minute price data has filled in during the day. You can see the over all pattern of the forecast was accurate. The price data fell to 10:45 AM ET and then rallied through the rest of the day. Look over the chart below and if you think this forecast would help you trade the E-mini, there is a free trial for both MarketWarrior 5 and DTN IQFeed. You can click here and here to learn more.

ES5Forecast_July10_Second

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