I often use the term ‘spoos’ here and some of you noobs may have wondered why the heck I’m calling the E-Mini S&P futures like that. As you know the ES is a futures contract with the S&P 500 index as its underlying that trades on the Chicago Mercantile Exchange (CME). All E-Mini contracts there expire quarterly in the months of March (H), June (M), September (U), and December (Z).
The word ‘spoo’ however originated back in the days in the XMI pit on the America Stock Exchange (AMEX) in New York. It comes from the symbol for the September contract: ‘SPU’. Even though the name is based on the September contract symbol, it is used to describe contracts of all expiries. When somebody speaks of the ‘spoo’ or the ‘spoos’, they are referring to the current, most active E-Mini contract.
Well we just rolled the active contract over to September and for the next three months when I’m talking about the spoos I am indeed talking about the September contract. For me the roll over into the September contracts really mark the beginning of summer trading. Usually that is a time for sideways churn but given what we’ve been through in the June (M) contract I have an inkling that things won’t be abiding by the usual script this year.
As a side note: The roll over also resets the fair value which is at its widest today, slowly degrading (actually increasing as it’s negative on the spoos) until we are near par with the actual cash index on the day of expiration (which was yesterday for the June contract). The why and how is a bit outside the scope of this post but I’m confident Google will help you educate yourself if you care.
Alright, so let’s see where we’re heading on those spoos. If you managed to snag long positions in the past two sessions then you are in pretty good shape and I suggest you hold at least a portion of your exposure for a ride lower. Every tick higher now establishes new support below and increases our chances that we’ll at least ride to ES 2108.75 – per the new U contract.
For now I’m holding my stop a bit above break/even but will be advancing it to the spike low near 2095 if we manage to scrape 2110 today or tomorrow.
That said – it seems the ‘easy part’ of the ride higher is nearing its end. Look here at the NQ which expresses quite nicely how much resistance we have accumulated on the way down. At minimum we’re going to stumble a bit starting at 4500 until 4550 – above it we’re in the clear and most likely destined to push higher. So if you’re looking for short opportunities then that’s your range
Remember when I was harping about my perfect gold entry yesterday? Well someone with deep pockets must have read this post because I was taken to the woodshed this morning and quickly relieved of my ill gotten gains (i.e. stopped out at break/even). In retrospect I should have taken partial profits when it reached the 3R mark. To be more nimble is supposed to be my modified modus operandi and I probably just have myself to blame. Quite a lot of intraday volatility across the board these days and we need to adjust our trading activities accordingly.
Quite annoyingly this actually bolsters the original entry but it’s way too late now to jump back in – revenge or chase-after campaigns usually result in losses.
Wheat may be a long if it manages to pop back above 510 – if it does then I’ll be long with a stop below 505 or whatever spike low is in place at that time.
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Let’s face it – most of you guys are pretty much outta here, and I myself am planning on taking Friday off. So for whoever is still left I’ll throw out a few juicy pre-Memorial Day freebies. Caveat – unless they start moving in the coming few hours I recommend you wrap them up or put your stop at break/even.
Spoos – if you still find them near that stack of Net-ines then a long position may be in order. I’m long here 1/2R with a stop below the daily NLBL at 2113.25.
EUR/USD – ya’ll know I hate this trade but I’ll take it anyway. If that 25-day SMA gives way then we’ll probably retest the lows. Don’t think that’s happening just yet during the long weekend (yes, Forex will be trading Monday).
Wheat long near 515 with a stop below 510.
Soybeans – grabbing a long here with a stop below 936.5. It’s soft support really – 1/2R only.
Gold! Very speculative long position here – 1/4R only. On a drop below 1202 we’ll probably retest 1195.
That’s it – see you later this afternoon. Now keep it cool and frosty and don’t get too crazy playing the swings. Remember, we’re going to see increasingly diminishing participation starting today – not that we saw a lot of it yesterday, except for that fake out spike to the upside.
You are not paranoid – they ARE out to get ya – watch your six!
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I’ve accumulated a good number of positions over the past week and decided to not take on anything more for the day. We still haven’t really taken off across major indices and in line with my adjusted modus operandi of remaining nimble I don’t want to get over exposed. So let’s do a quick run down of some of our recent victims:
The spoos thus far are looking good to go and I’m moving my stop to 2112 now which is at break/even.
AUD/USD – that’s a campaign I’ve been holding since last week. It somehow rolled over nail or something as it went completely flat and rolled back to the downside. Stop out at my trailing stop for a humble 1R profit.
AUD/CAD – boy that was an awesome entry this morning right before it took off like a rocket. Moving my stop to break even and will hold through the RBA minutes in about seven hours.
EUR/CAD – also one from this morning. I say meh here and this one may actually stop out. I love the formation on the daily but it was probably too early to try a long position. I only have 1/3R in this one so I’m holding it.
EUR/GBP – stopped out of this morning’s ST position. The original entry form last week is still good and my stop remains at break even. Not really loving the mojo on this one to be honest but I’m holding it.
Cable – a few more pips to the downside and I’ll be out of that one. I was hoping for a LKGB here but it kept dropping below the 100-hour SMA. Bummer really as this is a great setup and I would take it every single time. Perhaps we’ll get another chance at the daily NLSL further below.
USD/CHF – awesome entry here this morning and I’m moving my stop to break even.
Wheat – for some reason this one screamed continuation at me this morning. Very few traders would have taken a long after that long candle last week. Great entry and I’m obviously holding it although I’m pretty sure there will be a LKGB retest of the 100-day. Moving my stop to break/even and Bob’s my uncle.
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