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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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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Below I am going to describe using the MarketWarrior 5 automatic forecast for the S&P500 E-mini using the 5 minute chart. MarketWarrior 5 can make an automatic forecast for the 5 minute and the 60 minute chart. The 5 minute charts below are using the DTN IQFeed symbol @ES#. The forecast line is the red and green line. The forecast also includes the bottom triangles with a B inside and top triangle with a T inside. Each triangle has labels identifying the time and price of the forecast top or bottom.

The forecast below was recalculated at 9:15 AM ET on Monday June 15, 2015. The forecast covers the main trading session for June 15, 2015. When I use these forecasts, I usually recalculate the forecast in the half hour leading up to the start of the main trading session, which opens at 9:30 AM ET.  When I use this forecast, I always keep in mind that some of the forecast tops end up being bottoms and some of the bottoms end up being tops. The next chart will show how this forecast worked out.

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The picture below shows the price data for this chart after the main trading session ended. The forecast shows the largest move as a rally between 9:30 AM ET and 11:35 AM ET. The largest rally during June 15 occurred between 9:50 AM ET and 11:10 AM ET. The forecast for the rest of the day after 11:35 AM ET was for a series of sideways swings. The S&P500 E-mini did move sideways through the end of the main trading session.

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This is a review of the S&P500 E-mini forecast for June 10, 2015. The charts below shows the 60 minute E-mini symbol @ES# from DTN IQFeed. The MarketWarrior 5 software has an automatic forecast for the E-mini which just requires one button to be clicked to make the forecast. To use the forecasting tool you need to open the 60 minute chart for the E-mini and do a simple review of the most recent forecast. If the forecast is still accurately forecasting the Change In Trend (CIT) then you leave the forecast as it is. If the forecast is not accurately finding the CIT then you click the recalculate button.

The first chart below shows the MarketWarrior chart for the 60 minute ES. The chart shows the data through 9:00 AM ET on June 10, 2015. On this chart I have manually drawn red box labeled “Forecast Area”. This red box identifies June 10. At 9:00 AM ET I did a review of the forecast and decided it was still accurately finding the E-mini CIT so I made no change. If you look back at Article #5 you can see this forecast below is the same forecast shown in the Article #5 discussion of June 9. Next we will take a look at how the day ended up.

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The picture below shows the S&P500 E-mini chart at approximately 7:15 PM ET. The MarketWarrior forecast for June 10, 2015 had one CIT during the main session. This was a bottom CIT at 9:00 AM ET.  The chart below shows this forecast bottom CIT was exactly in the right place. When the 9:00 AM hour came around the E-mini started a rally and never looked back. This forecast would have help you be right with the intraday trend for a very large rally. The next step is to review the forecast in the morning of June 11, 2015 and make a decision to leave the forecast as it is or recalculate the forecast with a single button click.

If you like the forecast below download the MarketWarrior 5 free trial and subscribe to the DTN IQFeed free trial and watch the forecasts on your own computer.

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