EminiForecaster Blog and Update History

Accurate Stock Market Forecasts for the Emini SP and other Futures

Archive for February, 2009

EMF Official Forecast 20090227

The official EminiForecaster.com forecast for the trading week ending
February 27th is now posted.

There are no changes to the forecast. We expect the market to be up into
the 27th. As previously mentioned, the cycling is abnormal this week so
use caution.

Last week the market repetitively attempted to go higher early in the day
followed by afternoon selling. This is consistent with our overall market
rating which remains bearish. Be aware multi-day highs are likely to be
selling opportunities. This could induce selling at the key areas of 800
to the 810 area. The 840 area is also key for selling.

Friday made an attempt at testing last year’s low but came short of the
mark and then rallied into the close.. We will likely see testing of this
low area again soon. Thus the key levels on the downside are 750 and 740.

The OMR on Friday made a move towards the more bullish end of its range.
Friday was also option expiration which may have skewed these values.
Therefore we will wait to see how the OMR shapes up. For now it remains
bearish.

I usually do not mention the DOW, but it closed on Friday below the low of
last year; a price level that goes back to 1997. I also do not typically
delve into details of our current economic situation, but there are plenty
of reasons to be going lower as the government has not yet begun to
confront the REAL issues plaguing our economy. George Soros, one of the
savviest and richest traders in the world came out last week and basically
said there is no end in sight to the current economic crisis.

In consideration of the questionable cycle activity, it may be of benefit
to look to the intraday alerts for confirmation. I will review a couple
good entry techniques for this tool (examples are all for shorts so reverse
the logic for longs). Where a short bias is given: 1) use a moving
average of the highs to trigger a sell based on a 40 minute high (ie. 8
periods on a 5 minute chart). 2) Look to sell at or about a support or
resistance area such as a covering of a downside gap or at the Globex
session high area (or a high from earlier in the day). 3) Use a peaking
standard (14 period) stochastic on a 5 or 10 minute chart (I like 10
minutes) to try to pinpoint the high of the day for a selling opportunity.
Remember daily highs and or lows tend to occur in the first hour and a half
of the day 70+% of the time. Often a retest of this level mid day is a
great trading opportunity. If the market has already exceeded a move of
one times the average range (currently around 23 points), then use caution.
4) Use some combination of the above three entry techniques to turn
science into art. I believe combining cycles with these techniques and
other factors mentioned above should enable you, combined with good money
management, to be a winner a high percentage of the time.

Wishing you all the best,

Rob, Vadim & Staff

EMF Tentative Forecast 20090227

The EminiForecaster.com tentative forecast for the trading week ending
February 27th is now posted.

We tentatively expect the market to continue up through this coming new
week. However, be advised this particular cycle is showing some conflict in
the sub cycles that make this week very different from most cycle weeks.
Both Monday the 23rd and Friday the 27th come up as potential pivots.
Usually I don’t tell you these kinds of things but this week is exceptional
in this regard, so caution is urged. I will know more on Sunday.

The market has been cycling very well as previously mentioned. This week
the market is having trouble getting enough lift for it’s up cycle. As we
mentioned previously, this was anticipated. The overall market rating
continues to show a bearish rating, so short trading should continue to
prove to have better risk and reward.

Anticipated ranges are in the 20- 22 point area. Keep that in mind as you
place your orders and place stops etc. This has been discussed in previous
updates, so please review them for more information.

Key levels as of this writing are 813 and 820 area to the upside. To the
downside 775 to780 area are key. Even though the current cycle is up, the
market keeps trying to work against with a downside bias consistent with
the OMR. We are also playing with a gap area above the 800 -820 level that
could influence cycling if it comes into play.

Tomorrow is option expiration which may bring some additional volatility.

As always use caution in all manners of trading.

All the best,

Rob Vadim and Staff

EMF Official Forecast 20090220

The EMF official forecast for the trading week ending February 20th is now
posted.

http://eminiforecaster.com/members/membersblog/forecaster.php

There are no changes to the forecast. The market continues to cycle as
anticipated. We expect to see bottoming late on the 17th or around the
18th AM.

Friday closed at the extreme low. This is often associated with a trend
reversal however, over the weekend, anything can happen.

Looking to reports for next week shows the 18th as the first significant
report day. Keep in mind we are looking at more “bail-out” and other
government manipulation activity so be prudent with your money management.

Our overall market rating remains bearish. The current volatility appears
to be declining a bit. Median and average ranges are about 21.5 to 23.3
points respectively.

Key levels are the 800 to 805. If we manage to close below the 800 area,
it may invite a testing of the 745-750 area. To the upside, we see the 840
area and from there the 875 area. Closing above 875 will likely result in
continued upward price action.

Monday is a holiday- enjoy it!

We wish you the very best in your trading!

Vadim, Rob & the EMF Staff

EMF Tentative Forecast 20090220

The EMF tentative forecast for the trading week ending February 20th is now
posted.

http://eminiforecaster.com/members/membersblog/forecaster.php (click next
week).

We expect the market to continue to be in a downward bias until
approximately February 17th to the February 18th open area.

The market continues to cycle well and consistent with the forecast.
Today we had a pretty violent bounce following the market testing the
February lows. This had us closing near the midpoint of the cycle range.
I am not sure as of this writing what might have fueled that quick one hour
rally however, the cycle does suggest we may try to continue lower at least
into the lower range of today. As previously mentioned, try to be cautious
of reactions to new information (ie bailouts) impacting the market. Quite
often, closing at or near a high is bearish. Our overall market rating, as
usual remains bearish, so short trading should provide a better overall
risk reward profile than longs.

One of our members asked me this week about the age old saying, “Buy the
rumor, sell the news.” I replied as follows: Buy the rumor sell the news
is not a rumor- If market rallies into a report then probabilities set up
for a sell and if it declines into it then buy. I also like to look for
shorts following a close at the high.

Current median range is at or about 24-25 points. As a result, daily
reversals, as previously discussed may occur at or about this level. Today
is a perfect example. Try to keep in mind some of the other points I have
made for you in recent updates. Combined with some good money management,
there just might be some excellent information there that can really
improve your bottom line.

The market over the last month has alternated back and forth several times
in the 874 to 809 area. This is a trading range that will likely be broken
at some point soon. For now, we see the current key levels to the
downside 825 and 808. To the upside 847 and 860. We will update these
further on Sunday.

Please remember Monday is a holiday. Friday volume may be lessened due to
this. That really leaves one more trading day in our cycle besides
tomorrow. I have mentioned previously, when the market has a bias in one
direction (ie. Down as it is now), the winning side will often leave to
play for a long weekend. This leaves the remaining losers to impress
themselves with a nice low volume rally in absence of the bears. Be
cautious on thin volume markets.

It may be of interest to note: Front month Emini S&P Futures contracts
remain at a pricing below cash. Future month contracts are also trading at
a discount to the current front month. This indicates a low demand for the
risk associated with future deliveries. Typically a futures contract has a
carrying charge that requires it to be priced higher than cash as you go
out into the future. As of this writing, S&P futures are trading a full 10
points below the contract one year out. You can see this at:

http://www.cme.com/trading/dta/del/delayed_quote.html?ProductSymbol=ES&ProductFoiType=FUT&ProductVenue=G&ProductType=idx

I do not know when I have seen the S&Ps inverted like this. These are not
normal times.

Wishing you the very best,

Rob, Vadim and EMF Staff

Last Few Forecasts From New Platform

As you can see G-Lines continue to perform very well -

Sunday Forecast

The official EMF forecast for the trading week ending February 13th is now
posted.

http://eminiforecaster.com/members/membersblog/forecaster.php

There are no changes to the forecast from Thursday’s tentative forecast.
We see the market down this week overall.

On Friday we closed at a high. This is often bearish. An early turn is not
unlikely as we are seeing a divergence in internal S&P components following
the 860 level on Friday. The high from Jan 28th is a key area and we just
might see a reversal at or about this area which is approximately one
percent away from the current levels.

Key levels for the coming week are the 874-876 area. If we make it
through that level with volume or on a closing basis. 900 is not unlikely.
Be cautious about bailouts and optimism surrounding it early in the week
that could impact the forecast. To the downside, we see the 847 area and
the 837 area. If we manage to close below 837 or go through it with volume
or momentum, then 827 could follow. Look for pivoting around these
levels.

The last three waves, we have seen relatively normal cycling in the market
(for a change). The Overall Market Rating remains bearish, so short side
trading should still offer better risk and reward characteristics.

Use good risk management. Stay in the game. A few well placed trades can
often outdo many lesser planned trades.

We wish you the very best in your trading.

Rob, Vadim & Staff

Sunday Forecast

The official EMF forecast for the trading week ending February 6th, 2009 is
now posted.

http://eminiforecaster.com/members/membersblog/forecaster.php

There are no changes to the forecast.  Per the forecast, we see the market
declining into Tuesday PM / Wednesday AM and heading up from there.

I’d like to bring up an important topic regarding trading in cycles. Keep
in mind as we decline further (or rise further) in any cycle, the
probabilities for further success always decline theoretically.  Therefore,
it becomes important to preserve your profits in some measure. This is why
cycle trading has so many benefits.  You catch an entry at or near bottoms
or tops before others get on board and then benefit from new participants
entering in the direction of the new trend. The S&P loves a relatively
short trend that is just enough to lure in the uninitiated to their doom.
This occurs on all sorts of time frames in the S&P.

Many of you really enjoyed the study I did for you last week or daily
ranges and time of high / low.  Here is another great tool to add to your
toolbox for the S&P; in it’s simplest form it says, only sell short
following up days.  The application of this  simple concept is very
profitable and produced more than $30k in 2008 IF combined with trading at
the top of the cycle.  If you combine this strategy with EMF cycles and
apply it near tops of cycles, you can achieve an extremely desirable risk
reward ratio.  Why does it work?  Because it does what the wisdom of the
ages tells us to do:  sell (very) high and buy low.  When you do this in
any business, it lowers risk and increases reward potential by orders of
magnitude.  This strategy works best in bear markets and will tend to
result in flat equity during rising ones.

Key levels to anticipate for the coming week are the 815 and 800 areas to
the downside and 833 and 860 areas to the upside.  Be cautious, as always
in this market of sudden governmental manipulations and violent reactions
to reports throughout the week.  Maintain tight risk management in this
environment.

The alerts continue to do well.  However, as mentioned previously, pay
close attention when there are strong trend reversals over night as it can
result in changes in the alert status later in the day (as occurred on
Thursday).

Wishing you all the best,

Rob, Vadim & Staff