Welcome To The Real Spoo

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.

It's not too late - learn how to consistently trade without worrying about the news, the clickbait, the daily drama and misinformation. If you are interested in becoming a subscriber then don't waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Please login or subscribe here to see the remainder of this post.

Cheers,