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.
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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.
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