Benefits Of Trading Emini Futures - Part 2

(QQQ)(DIA)(SPY)(GLD)(SLV)

by DeWayne Reeves

The Benefits Of Trading Emini Futures - Part 2

We covered a lot of ground in the first article. Let's recap what we've discussed so far:

• Liquidity is never a problem


• No $25K minimum account balance for daytraders


• Margins as low as $500 intra-day


• 100% electronic means no front running, pump and dump or other shenanigans


• Taxes are based on the 60/40 split given to commodity traders

If you missed Part 1, you can read it here. For me, what I've already listed is more than enough reason to move from Stocks to Emini Futures, but wait... there's more!

• Commissions - also known as the cost of doing business. When I first started trading stocks through a flesh and blood broker, the average commission on a trade was $100-$200 to get in and a % of the profits to get out. The commission on the last equity position I closed out through a traditional brokerage firm was in excess of $3k. True story... Times have changed and with discount brokerage firms you will pay substantially less to trade stocks if you are a self-directed trader. Unfortunately, you do get what you pay for. No help, no advice and no shoulder to cry on. We use Daniels Trading exclusively for our Emini Futures Trading. Not only do we enjoy extremely competitive rates ($6-$7) per round turn, we also benefit from Burt and Leslie's many years of experience. They're not just brokers, they also trade. When you call in, you aren't sent to a phone room in another country, Burt or Leslie will answer the phone, on most days by the 3rd ring. You receive over 25 years of combined trading experience at a price that makes turning a daily profit, a little less daunting. If you trade 1 Emini Contract and make 2 points, that's $100. Subtract your transaction cost ($7) and you're left with $93.00. If you trade in size you might even qualify for a reduced rate. One thing you'll never get, is reduced service. This part of the equation puts you far ahead of every stock trader on Wall Street.

• Spread - The difference between the Bid and the Ask is called "the spread". With Emini Futures you will rarely see a spread larger than 1 tick during normal trading hours. 1 tick is the smallest increment that any market trades in.

• Research - There is none. No homework, no analyzing 50 different companies and 100's of charts every night to figure out where you might have some opportunity tomorrow. When you trade the Emini, you are trading the best of breed stocks lumped together. When you go long the ES you are buying 500 stocks at once (for $500 intraday). The folks who put the indices together have already done the heavy lifting. S&P, Dow, Russell, Nasdaq... these companies are the best of the best, that's why they are in the index. You simple apply your technical and/or fundamental prowess to determine if the next move is up or down. Your wife (or girlfriend) is going to love this. Your kids might even start to recognize you in a crowded room, like when you show up for their birthday party.

• Options - We've given the stock traders a hard time throughout this article, but what about the option traders? There's a tough job. Right? They have to deal with the underlying price, the strike price, volatility and time decay. Time what? Exactly! As an Emini Futures Trader you're only concerned with one thing - Will the market go up or down? Period! However, for those who are truly gluttons for punishment, you can trade Options on Futures. Here's the good news - Burt is an Option Savant. If you really want to go down that road, he can place and manage the trades for you. That service will obviously cost more than $7, but believe me, it's well worth it.

• Selling - Selling stocks often has a negative connotation. Some consider it un-American. Some have turned it into a criminal enterprise - Naked Short Selling, and on occasion the government simply says "Don't do it" as was the case with financial stocks not too long ago. There's also things to worry about like the up-tick rule. When you "go short" in the Emini Futures, there's no restrictions, no bans and no stigma. As Emini Day Traders, volatility is our greatest friend. If it's a trend down day and we have to wait for the market to move up before we can go short, half the magic is gone from our equation. As an Emini Futures Trader, you'll never deal with any of those headaches. If the market is tanking, catch a ride. When it starts to rally, change buses. I never said it was easy, but it could be that simple.

Turns out we need a Part 3 to finish this up. Stay tuned, there's more to come...

Emini Tweets And Other Stuff

Euro 6E Tweet - 111 Pip Drop

DOW YM Tweet - 99 Point Drop

DOW YM - CFRN Weekly Trading Zone

S&P500 ES - Weekly Trading Zone

As opportunities unfold we'll keep you posted.

Trading's Not Easy - But It Can Be Simple!

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Emini Podcast for Monday 02/04/13

Emini Futures Trading / SP Emini Posts New Multi-Year Highs

Quit Trying to Sell This Market!!!

Despite China raising there bank reserve requirement overnight and antigovernment demonstrations in the Middle East, the SP EMINI market posted new highs. The US market felt a little heat overnight when the Bank of China made the announcement but good earnings from Caterpillar (CAT) and other corporate news pushed the market higher. Today the volume was light with this move higher and the VIX is gradually growing.  A higher VIX means the “fear gauge” is building up at these levels especially going into a 3 day weekend.  Some commodities were BIG winners today Silver (31-year high) and Crude Oil.  Weekly Trading Zones (WTZ) which are published for “members only” on Sunday night came in at 1340/1341 on the top end today and 1334/1335 on the bottom end.

Between the Lines

Here's what our partners saw before the market opened last Monday.

When the market opened last Sunday evening we were between zones. On Monday we never touched a zone. (quite rare) Tuesday we touched the 1322/1323 WTZ twice. A very nice double bottom. The double bottom is not the point. The point is we touched a WTZ. On the chart above you see that point of contact labeled as A. From A you expect to go to B. Right? Where is B? Look at the chart. (keep in mind that A to B was worth 11 points zone to zone) From B one could only expect to proceed to C correct? Of course. Did it? No. Did it try? Yes. Did it try more than once? Yes. Did it fail both times? Yes. Were both attempts worth at least 5 points? Yes. Am I saying you can profit from a failed attempt? YES!

So what happened next? B failed twice to get to C so it finally moved on to D? Well, yes. Based on the alphabet as we know it D comes next and since B never fully made it to C after 2 attempts, we measure the move from B to D which is 5 points. We then see that D went 5 points back to E and then E traveled 5 points to F. (to the tick)

There is no disputing what the chart shows. There is no disputing the numbers we published to Partners before the market opened last Monday. The only real question is were you able to trade the numbers?

Well.... "Were you?"

Begin your jouney today towards a CFRN Partnership with a 1 week free trial.

If you apply within the next 24 hours, you will have the WTZ's before the market opens Tuesday. Once you have 'em, you can trade 'em? Drop into the Live Trading Room and we'll show you how we do it. We also publish Weekly Trading Zones for Crude, Euro Futures, and the Dow Emini. There's a rumor afoot that we might even publish numbers for Gold this week. Stand by Partners...

Personal note:

The Keri Jobe concert tonight was awesome! Even more awesome was meeting our friend and CFRN Partner Jeff. If you follow us on Facebook or Twitter ( @cfrn #karijobe ) you saw it unfold in real time. My only regret is that I didn't get a photo with Jeff.

CT out of the cave on a Saturday night.

Small tidbit:  “Full moon” starts tonight. 

Technically speaking the SP EMINI is still bullish.  Regardless of phrases like low volume, higher VIX readings, Middle East uncertainty, overbought, inflation and mixed economic news the chart is still pointing higher.  The money has been made “buying dips” and going with the trend.  Are you selling rallies and trying to pick tops????? If so, visit us at www.cfrn.net and our “training room” will point you in the right direction!  The close above the daily pivot today and on a weekly scale still has the SP MINI market in a bullish formation.  Pullbacks against 1332/1331 and 1325 area will be viewed as support on Tuesday.  On the top end of the chart 1350 then 1363 and 1374.50 is fair game.

Words of wisdom: buy dips but make sure you have stops in place.  Once this market does decide to correct you’ll be happy you limited your risk.

Stay Alert – Stay Alive!

Burton R. Schlichter
Daniels Trading

Emini Futures Trading / SP Emini Reaches 1340 Weekly Zone

A Bullish Force to be reckoned with!

The E-Mini S&P 500 reached a high today of $1340.00 in the midst of a variety of adverse elements! It is amazing that the E-Mini S&P 500 could blow-off the two warships heading for the Suez Canal. The canal is owned and maintained by the Suez Canal Authority of the Arab Republic of Egypt. The market shrugged off protests in Iran, Yemen and Bahrain. The volume decreased slightly. The Initial Jobless Claims Report came in higher than anticipated increasing 25,000. This is extremely disappointing as the recovery of this country is focused on the Unemployment picture. Current Unemployment at 9% is above the norm. US Core Consumer Prices rose. Inflation is still a major concern as many analysts will expound on our data and give their views on their forecasts. It is difficult to ignore this factor as food and energy prices remain high. Timothy Geithner had made commentary on our debt risk and that the $1.1 trillion deficit reduction plan would help with investor confidence. We had some strength in the Technology Sector today with Nvidia Corp up 9.4%.  Dr. Pepper Snapple Group shares were up 5.6 % and Coca Cola was up 1.7 %.

Tomorrow, we have no major economic reports to look for!

Between the Lines

Mom taught us at a young age,  "If it breaks you have to buy it." Thanks Mom.

Today the trendline was tested and broke beautifully on the 2nd test. Follow that up with a Bullish Cross and it just doesn't get much better.

What to potentially expect Friday! We may retrace or back and fill in pause as the market may simply need to retrace.  Today the low was $1328.50 and the close was $1337.25. Tomorrow, we may use the resistance of $1340.00 and look to potential support of $1321. The point of control or comfort zone of the E-Mini S&P 500 may be $1335.00 for Friday’s trading! We expect a continuation of the move today, but maybe later! If this market can break through the $1340.00 level, we look to $1343.50 becoming the new resistance.  

Each player must accept the cards life deals him or her: but once they are in hand, he or she alone must decide how to play the cards in order to win the game.
-- Voltaire

Best regards,

Leslie Burton

Senior Market Strategist

Daniels Trading

Emini Futures Trading / Mid-East Tension

E-Mini S&P 500-Tensions heat up in the Middle East!

 The E-Mini S&P 500 reached a high today of $1336.00. The volume increased. Tensions between Israel and Iran started to heat up as Iran’s War Ships are en route to Syria. Israel’s Foreign Minister regarded the voyage of the two Iranian War Ships as “provocation” by Tehran. This is a news story that could affect the US to a great extreme as the alliance between Israel and the US is so strong. Hopefully, the voyage will be viewed as a navigational slip and perhaps this could blow over as opposed to blow up.  We still are reeling on the riots in Egypt and now have further revolts in Iran, Yemen and Bahrain.  This brings up thoughts on Crude Oil shipments to the US and whether this turmoil will have some effect on our supplies. This also may weigh on the E-Mini S&P 500. The market has been extremely strong shrugging off the worst of reports and unrest globally. Here Dell Inc. had their shares up 11.9 %.  Producer Price Index was up .8 % in January. Housing Starts rose 14.6 %. Industrial Production slipped by .1 %.

Tomorrow, we look forward to CPI, Initial Jobless Claims and Real Earnings at 7:30 AM CST.

Between the Lines

S&P Emini Daily Recap / 021611 from DeWayne Reeves on Vimeo.

Today's market through the eyes of the CFRN Indicator Suite. If you're not using them...
that's just crazy!

Climb aboard and take the free trial today.
http://cfrn.net/apply

What to potentially expect Thursday!  Tensions between Israel and Iran could derail the E-Mini S&P 500 trend line! We do need to keep this in check. Note yesterday’s CFRN commentary and the resistance of $1336.00. We may retrace or back and fill or pause as the market may simply need to retrace.  Today the low was $1325.75 and the close was $1333.00. Tomorrow, we may use the resistance of $1336.00 and look to potential support of $1318. The point of control or comfort zone of the E-Mini S&P 500 may be $1331.75 for Thursday’s trading!  We expect a continuation of the move today, but maybe later! If this market can break through the $1336.00 level, we look to $1339.50 becoming the new resistance. 

We must become the change we want to see.

Mahatma Gandhi 

Best regards,

Leslie Burton

Senior Market Strategist

Daniels Trading

Emini Futures Trading / Asia Rallies On Globex

Bears Win Tug of War Today

Today’s disappointments were Retail Sales and the energy complex.  A modest 0.3% rise in retail sales for January and a December lower revision dampened the bull spirits.  In addition, Import prices rose by 1.5% in January as the cost of food and energy has skyrocketed.  The energy complexes including the refiners were down and indirectly weighed on the SP EMINI.  Crude settled at a multi week low, gasoline dropped over 1% as supplies build and demand remains low.  The 1:1 Gasoline Crack is at an abnormally high level and there was some unwinding of that spread which in turn weighed on refinery stocks and ETF’s like OIH.  Technically speaking, the SP EMINIS inability to sustain a rally over the CFRN Sentiment indicator or the 1327/1328 level gave the BEARS the upper hand on the close this afternoon.  The Weekly Trading Zone (WTZ) 1323/1322 level acted as key support today which was announced yesterday to those lucky readers. Sentiment quickly reversed to Bullish on the Asian session. If London confirms, tomorrow could bring new multi-year highs to Wall Street.

Between the Lines

SP Emini Daily Recap / 02/15/2011 from DeWayne Reeves on Vimeo.

Daily video recap of the SP Emini, Dow Emini, Euro FX, and April Crude as seen through the eyes of the CFRN Indicators.

Free Trial - http://cfrn.net/apply

 I am a SP EMINI trader what should I expect for tomorrow?

Tomorrow we should have an action packed day of economic reports.  Housing Starts and Permits, Capacity Utilization and Industrial Production and the Producer Price Index (PPI) are high impact reports and should rock the boat. Remember despite bad economic data in the past (uhhh Unemployment) this market has been running on one thing POMO.  So lets dissect the chart and see were this market might go tomorrow.  From there we can start framing out our trades using the CFRN Indicators or you own trading tools.  Initially let’s view 1319 or 1315/1316 levels as support for tomorrow and if everything frames up right at these levels I would look to probe the long side.  If you’re waiting for confirmation, trades above the 1328 area would give me reason to be aggressive and bring up my entry points to get long.  Trades above this pivotal level could open the door for a run to the 1335/1336 level were the market could run out of gas.  Common denominator, I’m still buying dips until something changes. 

Trend is your friend til it's not.  Use stop losses

Stay Alert Stay Alive

Burton R. Schlichter
Daniels Trading
Senior Market Strategist

1-866-928-3310