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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