Whipsaw Trading In The S&P 500-Key Support Levels - Forex News by FX Leaders

Whipsaw Trading In The S&P 500-Key Support Levels

Posted Friday, November 10, 2017 by
Shain Vernier • 1 min read

The S&P 500 looks to have a mind of its own, trading horizontally with “whipsaw” or “choppy” price action. Currently, this market is exhibiting noncommittal and sporadic behavior. Correctly picking a direction in these conditions can be a monumental task.

The good news is as active traders we do not need to correctly forecast market direction. All we are concerned with is getting in and out while making a few bucks in the process. There are several downside support levels for the December E-mini S&P 500 futures that may help us do just that.

 

December E-mini S&P 500 Futures

The trading plan I recommended earlier this week proved to be loser, only producing a positive move of five ticks. Of course, after the trade’s stop was run, the S&P 500 sold off dramatically.

E-mini S&P 500December E-mini S&P 500 Futures, Daily Chart

It is an unfortunate part of trading, but scenarios like these are unavoidable. Risk management and a solid trading plan are crucial to moving past them and into the future confidently. That being said, here are today’s support levels:

  • Support(1): 20 Day EMA, 2569.75

  • Support(2): Bollinger MP, 2563.50

  • Support(3): Daily SMA 2561.00

Overview: The area between the 20 Day EMA and Daily SMA is likely to form robust support. I will be looking to buy the Bollinger MP at 2564.25 for the remainder of the U.S. session. An initial stop below the Daily SMA at 2559.75 sets up a 1:1 R/R for over 20 ticks.

As always, trade smart and for tomorrow!

 
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About the author

Shain Vernier // US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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