Article #18 Forecasting the S&P500 emini 5min chart

The MarketWarrior automatic forecast for the 5 minute S&P500 E-mini, will forecast one day’s price action. This means the 5 minute forecast must be recalculated at least once a day. I usually recalculate the 5 minute forecast sometime in the hour before the main trading session opens at 9:30 AM ET.  Below is a 5 minute E-mini chart made with MarketWarrior 5 and DTN IQFeed. The chart runs through 9:10 AM ET on July 1, 2015. At this time I calculated the forecast for the rest of day. The 5 minute forecast can be seen below.

The forecast line is the thin green and red line. The forecast area on this chart runs through 16:00(4:00) PM. There are four Change-In-Trend shown in the forecast area. The first is a Bottom that occurs at 10:00 AM ET with a target price of 2062.48. The second CIT is a Top at 11:35 AM ET with a target price at 2071.09. The third CIT is a Bottom at 14:05(2:05) PM ET with a target price of 2059.41. Finally the fourth forecast CIT occurs at 14:55(2:55) PM ET with a target price of 2064.63. If the E-mini makes a CIT which is not in the forecast and starts to move away from the forecast, I will recalculate the forecast. Under normal circumstances I do not recalculate the forecast during the day.

ES5Forecast_July1b_First

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Below is the E-mini 5 minute chart with the price data filled in through the end of the chart. I have added a blue dotted line to mark the first forecast CIT. This was a forecast for a bottom at 10:00 AM ET. You can see on the chart below. this turned out to be the exact time for a Top CIT. When making a forecast based on cycles and patterns. it is sometimes the case that a top forecast will turn out to be a bottom and vice versa.

The second forecast CIT was very close in both time and price. The forecast Top was for 11:35 AM ET at 2071.09 and you can see the E-mini price bars made a top very close to the forecast.

The third forecast CIT was also very close in both time and price. The forecast was for a bottom at 14:05(2:05) PM ET at the price 2059.41. You can see below, the E-mini price and the timing of the corresponding bottom was very close to the forecast.

The fourth and final CIT forecast was for a top at 14:55(2:55) PM ET at the price 2064.63. The E-mini actually touched the forecast price level during the price bar for the time 14:55. The E-mini rallied into the last CIT forecast and continued to rally. It did not make a top. On this day July 1, 2015, the E-mini followed the pattern and price direction in the forecast almost all day expect for the last two hours 15:00 and 16:00. 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.

ES5Forecast_July1b_Second

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Article #17 Forecasting the S&P500 emini 60min chart

Each morning I review the overnight price action in the S&P500 E-mini. The MarketWarrior forecast for the E-mini on a 60 minute chart covers one week so each morning I make a decision to either recalculate the forecast for the rest of the week or leave the forecast unchanged. I do this before the main trading session opens. The chart below shows the 60 minute chart for the E-mini through 6:00 AM ET on July 1, 2015. The forecast shown on this chart is the same forecast seen in the previous article discussing the 60 minute E-mini chart. The forecast made the previous day shows a Change-In-Trend (CIT) at 7:00 AM ET on July 1, 2015 at the price 2073.43 and the overnight market had been moving up toward 7:00 AM and the price levels were similar to the forecast price levels. Because of this I decided not to recalculate the forecast.

The forecast shows three CIT for July 1, 2015. These are a Top at 7:00 AM ET at the price 2073.43. Second is a Bottom at 12:00 (noon) PM ET at the price 1068.38 and finally a Top at 19:00 (7:00) PM ET at the price 2073.07. On the chart below I have drawn a red box around the forecast area. This creates a forecast pattern for July 1, 2015 which is a sequence of Top-Bottom-Top and should look like a V or double top pattern.

This forecast was made with MarketWarrior 5 using DTN IQFeed. The tool that makes the forecast does not require any user settings or inputs, it is fully automatic.

ES60Forecast_July01_First

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The chart below shows the 60 minute E-mini chart during the 21:00(9:00) PM hour on July 21, 2015. The forecast for July 1 turned out to be very accurate. The pattern on July 1, 2015 shows a top early in the day at 5:00 AM then a bottom at 2:00 PM and finally a top at 4:00 PM. This created a Top-Bottom-Top pattern similar to the forecast pattern. Each forecast CIT was off by two bars. The price action during the main trading session was sideways but a rally did occur between the June 30 and July 1 main trading sessions. This occurred in the after hours session of June 30, 2015 and the pre-market session on July 1, 2015. When you see a trend between the main trading sessions it indicates there was some important international news that caused the Globex E-mini market to move overnight. Recently overnight markets have been affected by economic news from China or news about the Greek economic crisis. A strong up trend overnight often leads a sideways pattern in the main trading session.

ES60Forecast_July01_Second

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Article #16 Forecasting the S&P500 emini 5min chart

Recently I have become interested in the overnight session for the S&P500 E-mini. MarketWarrior 5 can automatically forecast the 5 minute and 60 minute charts for the E-mini. The 5 minute chart is the most appropriate time frame for forecasting the overnight E-mini because the volatility is often very low and the five-minute chart shows the small swings while the 60 minute chart does not. The first chart below shows the S&P500 E-mini 5 minute chart through 3:15 AM ET on July 1, 2015. I am using the DTN IQFeed symbol @ES#, which is the nearby E-mini contract. At this time this symbol is showing the September 2015 E-mini contract. I like to use the @ES# because it takes care of the roll over but when trading you need to keep track of which contract is being displayed so you can make sure you trade the correct contract month.

On the chart below. I have clicked the forecast recalculation button. You can see the thin red and green line. This is the forecast line. The forecast has four Change-In-Trend points on this chart. The CIT are:
(1) Top at 5:40 AM ET at the price 2072.39.
(2) Bottom at 6:05 AM ET at the price 2067.87.
(3) Top at 7:15 AM ET at the price 2073.78.
(4) Bottom at 8:10 AM ET at the price 2070.30.

On the chart below, I have manually drawn a red line labeled Forecast Cycle Pattern. This red line is the simplest representation of the forecast CIT points. Many traders find it easier to understand the forecast cycle when it is presented as a simple cycle line.

ES5Forecast_July1a_First

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The chart below shows S&P500 E-mini chart after it filled in the forecast area. The heavy red line under the price data is the Actual Forecast Pattern. This is a simple cycle line that represents the CIT points that actually happened in the E-mini. You can compare the simple cycle line in the two charts.

The forecast had a top at 5:40 AM. The actual top came at 5:25 AM. The forecast has a bottom at 6:05 AM and the bottom happened at 6:25 AM. The forecast had a top at 7:15 AM and the corresponding top occurred at 6:55 AM. The final forecast was for a bottom at 8:10 AM and the actual bottom came early at 7:35 AM.

The forecast points are usually off by a few bars but getting the cycle pattern correctly counts for a lot. If the forecast has the correct sequence of tops and bottoms and the correct pattern, then trading the forecast profitably is very possible. 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.

ES5Forecast_July1a_Second

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Article #15 Forecasting the S&P500 emini 60min chart

This week is shortened for the 4th of July weekend. There is no trading Friday July 3. The two charts below shows the S&P500 E-mini forecast for Tuesday June 30, 2015 on the 60 minute chart. The forecasts are made with MarketWarrior 5 using the DTN IQFeed symbol @ES# The first chart below shows the S&P500 E-mini through approximately 8:55 AM ET. At this time I recalculated the 60 minute chart forecast and the result is below. The forecast has two Change-In-Trend(CIT) times on June 30. The first is a top at 13:00(1:00) PM ET with a top price at 2068.38. The second CIT is a bottom at 20:00(8:00) PM ET with a bottom price forecast of 2059.38. Normally I do not recalculate the 60 minute chart forecast during the main trading session although you have the option of recalculating the forecast at any time.

ES60Forecast_June30_First

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The second chart below shows the S&P500 E-mini during the hour 22:00(10:00) PM ET at approximately 10:50 PM. The forecast for a top in the 13:00(1:00) PM ET was off by one bar as a top formed in the E-mini during hour 14:00(2:00) PM ET. The forecast for a bottom during hour 20:00(8:00) PM ET was off by two bars. The actual bottom came early at 18:00(6:00) PM ET.

Today, June 30, 2015 the overall pattern of the day, was a sideways pattern that made several swings up and down over the same price levels. The automatic forecast shows a pattern with an upward slope from the start of the day to the end of the day, which was not reflected in today’s sideways price action.

ES60Forecast_June30_Second

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New MarketWarrior Version Available

We have upgraded a few items dealing with the automatic S&P500 E-mini forecasts in the latest version of MarketWarrior. This is Version 5 build 2015.6.25. If you are using MarketWarrior 5 you can log into the owner’s page and download the appropriate upgrade installation file.  This is a free upgrade for all version 5 users.

2015June26_GC_Dly1

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Article #14 Forecasting the S&P500 emini 5min chart

Last week I could not put up any reviews for the automatic E-mini forecasts because we were finishing work on the latest version of MarketWarrior 5. The charts below show the forecast review for the 5 minute chart, automatic forecast for the S&P500 E-mini. These charts were made using MW version 5.2015.6.25 and the DTN IQFeed. We are using symbol @ES#. The new MarketWarrior version has some updates for the E-mini forecasting tools and you should download this upgrade free on the MarketWarrior 5 owners page.

The first chart below shows the automatic E-mini forecast that I calculated at 10:05 AM ET on Friday June 26, 2015. The automatic forecasts will only recalculate when you make the forecast recalculate. Otherwise it will remain the same all day. This 5 minute forecast cover one day. In the forecast there are only two significant Change-In-Trend (CIT) points. The first is a top at 11:20 AM ET at the price 2102.54. The second is a bottom at 13:05 (1:05) PM ET at the price 2097.77. The rest of the CIT points in the forecast occur after the main trading session has ended.

2015June26_GC_Dly1

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The next chart show the E-mini price data through 3:35 PM ET. I have added a blue dotted line marking each of the two CIT points described above. The forecast top at 11:20 AM ET was very close to a actual market top. The E-mini price at this top was below the forecast price showing market weakness.

The E-mini then fell to at bottom at 1:20 PM ET. The forecast was for a bottom at 1:05 PM ET. So the forecast bottom and the actual bottom were fairly close as you can see on the chart below. The price of the E-mini was much weaker than the forecast bottom price. After the bottom at 1:20 PM ET the E-mini followed the forecast and trended up at a gradual angle similar to the forecast pattern through the end of the chart ay 3:35 PM ET.

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 lean more.

2015June26_GC_Dly1

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Article #13 Forecasting the S&P500 emini 5min chart

Here is a review of the automatic forecast for the S&P500 E-mini that was made by MarketWarrior 5 using the DTN IQFeed subscription. Each day before the main trading session opens at 9:30 AM ET, I calculate a new forecast for the 5 minute chart. On the chart below, the forecast was calculated at approximately 8:15 AM ET. You can choose to recalculate the forecast at any time during the day or you can choose to use the same forecast all day. In a normal situation, I either use the same forecast all day or I recalculate just once during the day.

Today, June 17, 2015 is the day of a FED monetary policy statement, which will be released at 2:00 PM ET and the forecast below shows a Change-In-Trend (CIT) for 14:00 (2:00 PM) ET. When there is a important preplanned announcement from the FED that falls at the same time as a MarketWarrior CIT forecast, this automatically should become the focus of the forecast. In this situation the forecast for a bottom at 14:00 (2:00 PM) is the most important CIT in this forecast.

es5forecast_june17_fifth

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The 5 minute chart below shows the E-mini data through 16:30 (4:30 PM) ET. I have added blue dotted lines at the time of the forecast (CIT) points. There was a forecast top at 11:50 AM but there was no rally and no top at this time. The forecast top CIT at 13:00 (1:00 PM) turned out to be an accurate CIT, but for a bottom instead of a top. The most important forecast point was the 14:00 (2:00 PM) bottom CIT because of the FED announcement. I have added a small blue arrow to this chart showing  the bottom at 2:00 PM ET. This was the low price of the day. The S&P500 E-mini made a bottom and then a large rally within minutes of the FED announcement at 2:00 PM. This was an excellent forecast but it can be expected there will be a major intraday move when the FED makes an announcement, because there are a very large number of traders who try to trade the price move after a FED announcement. My personal experience with trading off of a FED announcement, is that it is difficult because of the speed and quick reversals of the price movements. The forecast top CIT at 15:25 (3:25 PM) was a good forecast and the E-mini fell through the end of the chart.

es5forecast_june17_sixth

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Article #12 Forecasting the S&P500 emini 60min chart

This article is a discussion of the MarketWarrior 5 forecast for the S&P500 E-mini for the 60 minute chart on June 16, 2015.  The MarketWarrior 5 automatic forecasts must be reviewed from time to time and a judgment must be made to continue using the same forecast or to recalculate the forecast. I usually review a forecast each morning before the main trading session for the S&P500 opens at 9:30 AM ET. The chart below shows the E-mini forecast after I recalculated the forecast at 8:55 AM ET on June 16, 2015. This was 35 minutes before the main trading session opened. The forecast shows a bottom at 7:00 AM ET and a top at 17:00 (5:00 PM) ET. There was bottom in the E-mini during the 6:00 AM hour so this forecast looked correct. This meant that for June 16 there was just one CIT forecast at 5:00 PM ET.

es60forecast_june15_third

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The chart below shows the same forecast as above but now the S&P500 E-mini has traded through 18:00, 6:00 PM ET. The size of the forecast rally was much to small when compared to the rally that actually occurred, but the direction and timing of the rally was correct. The forecast was for a rally from 7:00 AM ET to 17:00 (5:00) PM ET. The market rally started before 7:00 AM and has run past 5:00 PM. So the forecast rally time period overlapped most of the actual rally time period. Other than failing to see the large size of this rally, the forecast was mostly accurate.

es60forecast_june15_fourth

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Article #11 Forecasting the S&P500 emini 5min chart

There is a pattern in the overnight S&P500 E-mini that is occurring more frequently so in this article I am going to describe it. Back when gold was a bull market, the gold price would rally during the overnight session because the bull market was being driven by trading activity in China. Now the Chinese stock market is causing a similar effect in the overnight S&P500 E-mini. There is recurring pattern of a rally sometime between 1:00 AM ET and 4:00 AM ET. This rally is being influenced by the movements on the Shanghai stock exchange. There is a simple 12 hour difference between Shanghai and New York. The Shanghai stock exchange has two trading sessions, which run for two hours each. The one in the morning from 9:30 AM to 11:30 AM Shanghai time. This is 9:30 PM to 11:30 PM New York time. The second trading session runs from 1:00 PM to 3:00 PM Shanghai time, which is 1:00 AM to 3:00 AM New York Time. This second Shanghai trading session from 1:00 AM to 3:00 AM New York time is the cause of the overnight rally pattern that I am now seeing on a regular basis.

The MarketWarrior 5 software can make an automatic forecast for the S&P500 E-mini. The forecast can be made for the 5 minute chart and includes a forecast for the overnight session not just the main trading session. The chart below shows a forecast for the overnight trading session on the E-mini for June 17, 2015. The forecast was calculated on June 17, 2015 at 1:33 AM ET. On the chart below, I have drawn a red box to highlight the forecast rally. This forecast rally runs from 1:50 AM ET to 3:40 AM ET. This corresponds to the second trading session on the Shanghai stock exchange. The second chart shows what happened during this forecast rally time period.

es5forecast_june15_third

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The chart below now shows the S&P500 E-mini through 8:15 AM ET. I have manually added the red box to highlight the forecast rally time period. I also added the extra triangle markers above and below the red box so you can see the start and end of the forecast rally. The forecast rally ran from 1:50 AM ET to 3:40 AM ET. The actual market rally ran from approximately 1:10 AM ET to 4:40 AM ET. The forecast covered the majority of this rally and was right in the middle of the actual rally time period. Up until recently main land China used the financial center in Hong Kong. This is now changing. As main land China becomes a larger financial center, the overnight trading session in the E-mini is going to become increasingly active for US traders.

es5forecast_june17_fourth

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Article #10 Forecasting the S&P500 emini 60min chart

Here is a review of the 60 minute chart forecast for the S&P500 E-mini covering June 15, 2015. The chart below shows the 60 minute chart for the E-mini through 8:00 AM ET. I am using the symbol @ES# from DTN IQFeed. MarketWarrior 5 will make an automatic forecast for the 60 minute S&P500 E-mini. At approximately 8:55 AM ET I calculated the forecast for the first time this week. On the chart below, I have drawn a red box identifying the forecast area for Monday June 15, 2015. The forecast for Monday shows a small range for the day and only two small Change-In-Trend (CIT) points. The CIT points are so small the indicator did not automatically label them so I have manually added the labels. The label “11AM” is added to a bottom forecast. The label “3PM” is added to a top forecast. The overall forecast for Monday June 15, 2015 is for an up day with a small range.

es60forecast_june15_first

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The picture below shows what happen on the 60 minute chart for the E-mini on June 15, 2015. The main pattern for the day saw a rally from 9 AM ET to 1 PM ET and the over all day had a small range. The forecast pattern was correct with the CIT points each being off by two bars.

es60forecast_june15_second

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