EminiForecaster Blog and Update History

Accurate Stock Market Forecasts for the Emini SP and other Futures

Archive for April, 2009

EMF Tentative Forecast for Thursday

The Eminiforecaster tentative forecast for the trading week ending May 8th is now posted.

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

We expect the market to be up next week through Thursday PM / Friday AM and then start up from there.

This week our forecast ran into several days of Fed price action, which I forgot to discuss in the last update.  The Fed meetings can upset the natural cycle. As always, it is good to keep an eye on the major new reports anticipated on the news feed and calendar pages of the members area.

The market is trying to get some catch up going here to meet the natural cycle by being down today. If we are right, then we should see some more downside tomorrow, followed by an up week next week.

Volatility has kicked up a bit since last report.  We have hit multi-month highs.  It is difficult to fathom how the market can continue higher in the midst of such bad news and with the expectation of much more bad news to come.  We expect there will be more banking and real estate issues at some point that will shift the mood.  Of course this is well timed., as previously mentioned for the period following mid June.  The option pricing, which gives us information about the mood a month out or so is looking bearish to neutral.

Key levels to look for at this time are 885 and 900.  To the downside we see 845 and 832 as key.

As always, manage risk and prosper!

Rob, Vadim & Staff

Sunday Forecast

The EminiForecaster official forecast for the trading week ending May 1,
2009 is now posted.

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

There are no changes to the forecast and the market continues to respond
in cyclical fashion as previously anticipated.  We expect this week to
decline for the whole week.

All previously reported levels are also unchanged.

Please refer to Thursday’s tentative for a more complete report.

Wishing you the very best,

Rob, Vadim & Staff

EMF Thursday Tentative Forecast

The Eminiforecaster tentative forecast for the trading week ending May 1st is now posted.

http://eminiforecaster.com/members/membersblog/forecaster.php  (click Next Week)

We expect the market to decline for the week starting Monday.  The current forecast is still showing we should continue higher.

This week’s forecast has done quite well aside from Monday where there was bearish news driving the market south. The upward bias has held according to the forecast the rest of the week.   The market does appear to be losing some steam however, which suggests things are in place for a good forecast next week.   The alerts this week have not done as well as anticipated as the alerts are subject to whipsaw where there are sudden trend changes.

The daily ranges have remained somewhat constant at around 20 points per day and the VIX is also flat at or about 37% which translates to just under 20 points as well.  There are plenty of reasons the market could start heading lower again with this kind of complacency.

There is a strong seasonal towards rising into mid June and then declining from there, so the market may have a number of weeks of continued attempts at some upside overall before a new show comes to town that is downward biased though.  Don’t be surprised if it comes a bit early this year though.  The VIX has a much higher than random percent chance of rising (bearish for the market) between now and May 10, but has an overall tendency to decline into very early July.  These factors also line up into the general scheme I am describing above.   From an option pricing perspective, the market also remains in the slight bearish camp as well.

Key levels are 860 and 874 area to the upside. To the downside we see 830 and 822 as key.  These are good areas to plan your risk/reward and stop placement around.  If looking for a short, I always like to see a rally into a reasonable key area. For example, I’d like to be as close as I can to the 865-874 area to short because I can expect my risk to be the difference between my entry and the upper level. So, if I sold at 865 and hit my lower area of 822, I might see 40 points of gain on my 10 points of risk, or a 4:1 ratio.

Manage your risk, and the gains will come (usually when you are not looking) :-)

Wishing you the very best,

Rob Vadim & Staff

The official EminiForecaster forecast for the trading week ending April 24th is now posted.

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

There are no changes to the forecast. We expect the market to continue its ascent through this week. Be cautious of retracements that could occur at or about the 874 area regardless of the Gline. Also try to be apprised of news that may impact the market- We are at what might be lofty levels here from the March low- something on the order of 20% higher.

There are no changes to the key levels.

Wishing you the very best-

Vadim, Rob & Staff

The EminiForecaster tentative forecast for the trading week ending April, 24 is now posted.

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

Last week’s forecast called this week as down. However, the market has headed about 10 points higher during this down forecast from the previously forecasted turn, so the bull run continues. This week’s forecast sees the market continuing higher and we see this continuing into the 27th or so at this time. So we anticipate the market to be up all week next week overall starting from today’s close/Tomorrow’s open. Key levels at this time are the 874 and 900 areas to the upside. Some retracement from the 874 area is expected initially with continuance to higher levels, however a minimum of 874 is expected for next week. To the downside the 840 and 830 levels are key.

We have seen around a 20% reduction in range in the last couple weeks which is suggestive of complacency and a continued bull run. Tomorrow is option expiration which may bring some additional volatility. Index option calls continue to be overpriced which should be bearish, so there is not a huge amount of confidence. This goes hand in hand with the declining range.

Therefore, the market overall may not be able to go high fast and should be quiet. If there are any negative surprises however, expect it to have some downside strength. Therefore as long as things remain quiet and there is not a lot of new surprising information being fed into the markets, we should tend higher into the month’s end and/or through next week.

That’s all for now-

We will update again on Sunday.

Wishing you the very best,

Rob, Vadim & Staff

Sunday Forecast

The EminiForecaster.com official forecast for the trading week ending
April 17th is now posted.

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

We expect the market to start declining into Friday buy area on Monday.

High and Low levels for this week are expected in the 854 area and 874
area and below 820 and 810

Because Friday had no market data the current quotes will stay there
untilltomorrow morning.

So much of our price action lately has been gaps, it is hard to trade
because one overnight gap can be several days range. This tells us there
remains to be a lot of uncertainty in the markets.

Wishing you the very best,

Rob, Vadim & staff

Thursday Forecast

The EminiForecaster.com tentative forecast for the trading week ending
April 17th is now posted.

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

We expect the market to start declining into Friday buy area on Monday.

Tomorrow April 10th the market is closed.

The current forecast for this week looks pretty good with the help of
today’s huge rally

So much of our price action lately has been gaps, it is hard to trade
because one overnight gap can be several days range. This tells us there
remains to be a lot of uncertainty in the markets.

Market did get into the 820 and 810 area as was previosly mentioned but
only staed there for 2 days consolidating before exploding up today.

The levels for next week will be updated on Sunday.

Wishing you the very best,

Rob, Vadim & staff

Money Management Bonanza

One of the very worst things that can happen when you begin to trade a new trading system is to start losing right out of the gate. Just about anyone will tell you this occurs to them, “every time” (let me hear a big Amen). This tendency of human behavior is not just limited to trading a system you just found or created either. When I managed hundreds of client accounts, they would all pile in at certain times and leave at others that guaranteed they would lose. They did this with such remarkable accuracy buying my equity highs and selling my equity lows, it would amaze you. Why does this occur and how does one get the best (instead of the worst) of it?

When one is drawn to a trading program, it is because it is doing well. Never the opposite. Ever get an evening call from a broker in some boiler room in New York pitching you with a money manager’s performance that is losing, saying, “Mr. Prospect, this money manager has lost so much money recently, that if you come in with him now, you will surely be a winner?” I didn’t think so. So let’s recognize we are drawn to a new trading system or trading program at any given time because it is doing well. Step one to avoiding the inevitable is to track the trading program for a while to wait for it to not be at a new equity high.

It is simple; buy low and sell high. Maybe nobody ever told you that phrase applied to the equity curve on the money manager or trading system you were looking at, but the principle is solid.

On a trading system that trades the Emini S&P contracts or the SPYders shares etc. I would wait for a drawdown to occur that was average before entering. So you say to the broker, call me back when this money manager is losing, not winning (TIP: that might help to get the broker off the phone).

In the event I am already trading the system, and wish to add contracts for compounding, I use this simple rule of thumb: I wait to increase my equity enough to add a contract while the system is in a new drawdown from an equity high I benefited from. In other words, I will make enough on the system so that after drawing down from the high, I still have enough to add the new contract or shares. What this does, is it increases the probability I will not draw down while doubled up. This is also very important from a psychological stand point as well, because when your equity fluctuations double from having added new contracts or shares, it will likely be a bit unnerving at first; particularly if you are not up. This strategy helps to protect your earnings.

How do I get out of a trading system or money manager I am trading? I get out while I am ahead. If the system is making too much money too fast, it will likely implode, so it is best to get out while the going is really good. Oh yes, you might leave some good gains on the table at some point, but in the long run, this has always proven to be right. Look at any S&P or NASDAQ chart from late in the year 2000 and you will see what I mean. When the curve goes exponential, get out. Buy something that’s low, quiet and poised for growth.

These simple principles will serve you well, but it is hard to do. Grit your teeth and do the opposite of the herd as I have described above. Will it be a money management bonanza? Maybe. If you can stick with it, apply the above principles and manage your risk, I’ll will see you in the winner’s circle next year.

Sunday Forecast

The EminForecaster official forecast for the trading week ending April 10th
is now posted.

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

We expect the market to rise into the April 9th close to April 10th open
area.

The G20 meeting has completed and another ton of money will be put in to
stimulate the world economy.    We continued to climb as expected from mid
week, but as mentioned, trading was difficult due to the gaps reminding me
of one of my favorite trading phrases, “What a difference a day makes.”
Hopefully the gap craze will subside making trading a bit easier.

All other indications remain the same as I wrote on Thursday.  The
forecast is showing upside this week early on and then a decline on Friday.
 Contrary to that, I would expect some downside this week even though the
forecast is up, so be cautious about entering new positions at these high
levels if you are not already in; keep it tight.  If we are to see some
retracement, it is likely to occur early in the week (ie. Monday where the
Gline is flatter). Watch the alerts for entries that confirm the forecast
and that are at favorable levels.

Key levels for the coming week are the 870-875 area.  I do not really have
another number for the upside since we are at this high already.  To the
downside I am seeing 822 and 809 as key.

Wishing you the very best!
Rob, Vadim & Staff

EMF Tentative Forecast

The EminiForecaster.com tentative forecast for the trading week ending April 10th is now posted.

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

We expect the market to continue to rise as forecasted into the close of the 9th / the open of the 10th area and then decline from there.

The current forecast doesn’t look that great because much of the weeks range occurred in a down gap on Monday morning.  The turn in the market came a few hours early.  As mentioned previously, the market is excited to go for some advancing.  This is largely due to a seasonal tendency for a decline in volatility during this period (which is bullish).  The overall market rating remains bearish.  This is a longer term market rating; longer in duration that the forecasts.,  There is also a seasonal tendency for a high around June 17th (plus or minus) and some longer term cycle work showed us as being up, as I had mentioned in previous updates, for a good month or so.

So much of our price action lately has been gaps, it is hard to trade because one overnight gap can be several days range. This tells us there remains to be a lot of uncertainty in the markets.  The price action is dominated by strong swings from sell-offs, so bullish trading may be safer in the present term. The updates and alerts have also done well this week, but because of the gaps, it has not been able to capture a lot of points.

Please also be cautious when we hit our key levels very early in the week (as in Monday and Tuesday this week).  These are areas where you can lock in some profits, however, as always, this is a double edged sword because you can miss some big winners by taking profits earlier; so use caution.

Last week and this week, the magnitude of the forecast on Friday is quite large with respect to the rest of the week.  When this occurs, please be aware that this magnitude may not necessarily materialize, but that the overall direction at that time is anticipated to be in the direction of the forecast.   Often, in these cases, the forecasted move may come a bit early.

Key levels to the upside are the 845 and the 874 level.  To the downside the 820 and 810 areas are key.  I will update these again on Sunday as market conditions change.

Wishing you the very best,

Rob, Vadim & staff