3 Technicals Reasons Why ES Will Hit 5450
Summary
TLDRIn this video, Anthony Celli discusses why he believes the E-mini S&P is currently in mean reversion mode, signaling a potential short-term pullback. He uses technical analysis with tools like Bollinger Bands, moving averages, and RSI to support his view. Celli advises trading with caution, using small positions and options to manage risk. He emphasizes the importance of differentiating between swing and day trading strategies. Celli also highlights key levels to watch and advises against large overnight positions in the current bullish market.
Takeaways
- 📊 Anthony Celli discusses the E-mini S&P (ES1) being in mean reversion mode, not necessarily indicating a bearish market trend but a short-term pullback.
- 📈 He uses the continuous contract for the E-mini S&P on TradingView to analyze the market's technicals.
- 🔢 The technical indicators used include a five-day simple moving average, Bollinger Bands, a beacon indicator, and an anchored VWAP to the opening day of the year.
- 📉 Bollinger Bands are coming inward, signaling a mean reversion or consolidation phase with contracting volatility.
- 🎯 Anthony identifies a potential execution range of 5550 to 5450, where he expects the market to stay below and move downwards.
- 🚫 He advises not to go long if the market closes daily above the identified resistance area near 5550.
- 🧩 Anthony is currently short using micros and plans to use options on futures, emphasizing the importance of position sizing and risk management.
- 📉 RSI is overbought and returning to a neutral range, which adds to the bearish outlook in the short term.
- 📉 The market's behavior is consistent with past patterns of mean reversion, as demonstrated by historical price movements.
- 🛑 He suggests maintaining small positions overnight and being prepared to adjust or exit positions based on market closes relative to the resistance level.
- 🇺🇸 Anthony ends the video with a Fourth of July wish for his fellow Americans and emphasizes the importance of taking time off and resting.
Q & A
What is the main topic of Anthony Celli's video?
-The main topic of Anthony Celli's video is his analysis of the E-mini S&P being in mean reversion mode and his technical outlook on the market's short-term movements.
What does Anthony mean by 'mean reversion mode'?
-Mean reversion mode refers to a situation where the market is expected to move back towards its average or mean value after a significant deviation, indicating a potential short-term price correction.
Which financial instrument is Anthony using to analyze the market in his video?
-Anthony is using the E-mini S&P futures, symbolized as ES1, for his market analysis in the video.
What is the significance of the five-day simple moving average in Anthony's analysis?
-The five-day simple moving average serves as a technical indicator in Anthony's analysis, helping to identify trends and potential reversal points in the short term.
What is the role of Bollinger Bands in Anthony's trading strategy?
-Bollinger Bands are a key component of Anthony's strategy, indicating market volatility and potential mean reversion or consolidation periods when the bands are coming inward.
How does Anthony use the VWAP (Volume Weighted Average Price) in his analysis?
-Anthony uses an anchored VWAP to the opening day of the year to gauge the market's performance relative to the volume-weighted average price, providing a reference point for market behavior.
What does Anthony mean by 'beacon indicator'?
-The beacon indicator is a set of Fibonacci lines placed on the Bollinger Band peaks and troughs, providing additional technical analysis for market trends and potential reversals.
What is Anthony's stance on using options and micro positions in his current market outlook?
-Anthony is cautious about using options and prefers micro positions to manage risk, especially when trading against a strong primary trend, as he aims to maintain a small and precise position to avoid being price sensitive.
What is the significance of the RSI (Relative Strength Index) in Anthony's analysis?
-The RSI is used by Anthony to confirm market conditions, with an overbought RSI indicating potential exhaustion and a possible move back towards the mean or lower prices.
How does Anthony plan to manage his trades during the Fourth of July week?
-Anthony plans to keep his positions small and manage them overnight, with a focus on maintaining a short position as long as the market stays below 5550, targeting 5450, and adjusting his strategy based on market closes.
What advice does Anthony give about differentiating between swing positions and day trades?
-Anthony advises traders to keep swing positions and day trades separate, with a clear plan for each to avoid confusion and ensure proper risk management.
Outlines
📊 Market Analysis: E-mini S&P Mean Reversion Mode
Anthony Celli introduces his video, '10 Minute Technicals,' focusing on the E-mini S&P, suggesting it's in a mean reversion phase. He clarifies this doesn't signal a bearish market trend but indicates a short-term pullback. Anthony uses the ES1 symbol for continuous contract analysis on TradingView, incorporating a five-day simple moving average, Bollinger Bands, a beacon indicator, and an anchored VWAP to the year's opening day. He notes the importance of adjusting for contract changes, especially after the June to September rollover. The video emphasizes the market environment's indication of mean reversion through contracting Bollinger Bands, suggesting a potential market drop within a specified range. Anthony shares his bearish stance, using micro positions and options, and highlights the importance of not fighting the primary bullish trend.
📉 Technical Indicators and Trading Strategy
In the second paragraph, Anthony delves deeper into the technical indicators guiding his trading strategy. He discusses the significance of the RSI indicator moving from overbought to a neutral range, advising against selling when overbought in a bull market due to the potential for sustained high values. Anthony emphasizes the need for consistent closes below specific resistance levels to confirm his short-term bearish outlook. He outlines his trading approach, favoring small, smart positions, especially overnight, with a clear plan to differentiate between swing trades and day trades. He concludes with a reminder to maintain separation between core positions and day trading activities, ensuring a strategic and planned approach to trading during market volatility.
Mindmap
Keywords
💡Mean Reversion
💡Bollinger Bands
💡E-mini S&P
💡Simple Moving Average (SMA)
💡Anchored VWAP
💡RSI (Relative Strength Index)
💡Trading View
💡TradeStation
💡Volatility
💡Micros
Highlights
Anthony Celli discusses why he believes the E mini S&P is in mean reversion mode, without abandoning the rally or predicting a bearish market.
The video uses the E mini S&P symbol ES1 for technical analysis on TradingView.
Futures are recommended for trading the S&P, with a link provided to TradeStation for account opening and connection to TradingView.
A daily chart with candlesticks, a five-day simple moving average, Bollinger Bands, and a beacon indicator is used for analysis.
An anchored VWAP to the opening day of the year at 5229 is used, with adjustments for contract changes.
The importance of monitoring the market's behavior relative to the rollover from June to September contracts is emphasized.
Bollinger Bands narrowing indicates a mean reversion or consolidation phase in the market.
A trading range of 5550 to 5450 is identified for potential market movement based on the current technical analysis.
A daily close above the trading range could signal a reversal to an upward trend.
The use of micro positions and options is suggested for managing risk in a strong bullish primary trend.
RSI is used as a confirmation tool, with the market showing signs of exhaustion as it falls from overbought levels.
Consistent closes below 5547 are needed for a short-term bearish outlook.
Overnight trading strategy involves keeping stops just above 5550 and targeting 5450 if below this level intraday.
The Fourth of July week and unemployment data are considered in the trading plan for the week.
Differentiating between swing positions and day trades is crucial for a successful trading strategy.
A reminder to keep trading positions separate and to have a plan for execution is given.
A final note to enjoy the Fourth of July and to take time off, emphasizing the importance of rest in trading.
Transcripts
[Music]
what's up Traders Anthony Celli here and
welcome to 10minute technicals in
today's video I'm going to go over why I
believe the E mini S&P is now in mean
reversion mode now that doesn't mean I'm
throwing in the tow on this rally and I
think that the market is just turning
bearish I just think in the short term
the market is going to have a mean
reversion move back down and I'm going
to show you through the technicals why I
believe that and today's video I'm going
to be using the - mini S&P symbol ES1
exclamation point that's the continuous
contract here on trading View for the EM
mini S&P now I use Futures to trade the
S&P and if you want to trade Futures on
trading view you can go to
tradestation.com
Anthony uh and you can open up an
account with trade station and then you
can connect it directly here to trading
view to trade Futures now here on the
charts I have a daily chart I'm using
candlesticks the red moving average is a
five day simple moving average Ballinger
bands are 20 period three Center
deviation around the Ballinger bands is
my beacon indicator which is just a 70%
50% and 30% lines basically fibs on the
Ballinger band Peaks and I also have an
anchored vwap uh to the opening day of
the year which comes in at 5229 make
sure you have your badj your adjust for
contract uh changes because we recently
rolled over from June to sep uh and that
was on June 17th when that became the
front month sep which is U uh and so
that's a symbol for seep and then you
can uh do what I did I actually anchored
a vwap to the first day that sep became
the front month because I want to see
what the Market's doing relative to the
role even though June is off the table
it's rolled over I like to see how the
volumes come in on a new contract like
even though today's July first it's the
first day of a new quarter really for
futures first day of the new quarter
comes in more around June 17th um
because of rollover so everyone that's
in sep expiration you know doesn't
expire till the end of the quarter now
and so it's a little bit different with
your times but it's just something to
keep an eye on so I'll keep that on
throughout the quarter and I also have
an RSI now now let's talk about a few
basic things first off Ballinger bands
that's the lead uh for my strategy
whatever the Ballinger bands are doing
that's going to give me the number one
thing to look at for what I think the
market environment is when you look at
the market environment right now you
have Ballinger bands coming inward
anytime Ballinger bands are coming
inward it tells me we're in mean
reversion or consolidation right pretty
simple volatility is Contracting it's
not expanding you'll go back in this
area over here um where volatility was
expanding when the mullinger bands were
opening up like a mouth and when it
stops expanding they start to contract
you see consolidation here and now I
think we're in mean reversion so what
I'm gonna do is I'm goingon to take my
square and I'm just going to box out the
area which is basically going to be
roughly
5550 um down to
5450 that's my range of execution So
within this range is where I look for
the market to potentially okay stay
below there and go down now mind you if
the market uh gets a daily close above
this area I think we can start heading
back up but for now I think we're going
to go back down and trade yellow and I
think it's going to look very similar uh
to what we did here so let me grab my
Square back in this area and this is
exact similar situation so if you've
watched my 10-minute technical videos in
the past this was an area where I said
look for mean reversion it went down
there it kissed yellow and came right
back off and I think it's a very similar
situation what's what adding to my
bearishness in this current moment and
why I'm sitting here short right now I'm
using micros for this position and I'm
going to use options I haven't used
options yet I was waiting to see how the
market close today so I'll use options
on Futures as well um but I'm going to
use micros because I want to sleep at
night I want to keep a small position
and anytime I'm going against a primary
Trend which has been very strong and
bullish why do I want to be in with a
full position with even the S&P I'll use
the Min snps during the day to day trade
it um but I'm not going to keep them
overnight and I'm going to continue to
scale in Dripping my position in using
micros because so I don't have to be
price sensitive because let's face it
anytime you're fing these powerful
upward Trends shorting Futures index
Futures it's typically a losing battle
I'll be honest with you I mean you know
it's not 2008 or it's not covid where
we're in this you know bare Market where
shorting is the play it's not and so I'm
gonna be very small and very precise
with what I want to do I want to sell
rallies not breaks right so we have this
anchored vwap I have the 5-day moving
average and I have my beacon level which
all come in between
5537 and basically 5547 5550 we call it
so that area to me is massive resistance
and as long as we stay below it I think
we're going to head lower now additional
confirmation I got recently was look
what happened up here in the RSI right
volatility was expanding okay Market got
um and made new highs started to rotate
lower Ballinger came in and you started
to see the RSI uh go from overbought
back into this range and most people
like to look to sell RSI right as it's
getting overbought I like to wait wait
for it to get below that little moving
average just let it get back below 70
let the market start to show me that
look at okay it's done because I like
buying RSI oversold in Bull markets
pretty soon pretty quickly I don't like
selling oversold or overbought I'm sorry
I don't like selling overbought uh in
know a bull market because it could stay
overbought for months I mean look at
Nvidia you get crushed trying to sell
into that rally um and like I said
shorts is a hard trade in a bull market
this strong and I thought today the
market did very well it's why I didn't
get into options yet been waiting to see
how the Market's got to close and you
got to have consistent closes below 5547
5550 for me in the short term I'm just
moving overnight my stops just above
5550 I'll give them a little room above
there and as long as intraday when I
wake up in the morning and we're below
there I'll look to be short for a target
of
5450 and I just keep it really simple
5-day moving average anchored vwap from
the first day uh of the new contract
from June 17th boner bands are coming
inward RSI is overbought coming back
into this range Market's telling us it's
exhausted and it's not just by one
definition One technical definition it's
by multiple things and so when I see
this it's forcing my hand to be in this
uh and you know it's just about being
small and smart in this look at we got
Fourth of July week we've got
unemployment on
Friday I just look at it like this small
positions overnight if the market comes
in down great you know I'll have a small
winner if I get stopped overnight no
worries I have a small loser I'll come
back in watch it during the day and as
long as we stay below 5550 my Target's
5450 I'm keeping it super simple super
short not even full 10 minutes and the
10-minute technicals this week that's my
reasoning you know I don't complicate
things but one last thing I want you to
keep in your mind anytime you're looking
at setups like this you have a swing
position that's your core position and
you have your day trading right my day
trading is going to be focused on the
short side I can get a little more
aggressive I can get a little bigger
with position sizing during the day
overnight I'm not going to sit on a big
short position in a Blow Market that's
what they make micros for that's what
they have options for so you have to
differentiate the two and don't let a
swing position turn into a day trade or
a day trade into a swing have them
separated and have a plan for when you
go into to execute that does it for this
week's 10-minute technicals cheers
everybody and if I don't uh hear from
any of you or see any of you which I
probably won't because this is a video
uh I want to wish all my fellow
Americans an absolutely wonderful uh
fantastic Fourth of July and to all the
Traders out there they're going to be
taking time off take time off get some
rest uh I'm sure it's well deserved I
know all of you work very hard cheers
everybody
[Music]
y
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