3 Technicals Reasons Why ES Will Hit 5450

Summary

In 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

00:00

📊 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.

05:01

📉 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.

Keywords

💡Mean Reversion

Mean reversion is a financial theory suggesting that asset prices and returns eventually revert to their long-term average or mean. In the video, Anthony Celli explains that he believes the E-mini S&P is currently in mean reversion mode, indicating that he expects the market to move back down to its average level after a period of deviation.

💡Bollinger Bands

Bollinger Bands are a type of price envelope developed by John Bollinger. They consist of a middle band (a simple moving average) and two outer bands (standard deviations away from the moving average). In the video, Bollinger Bands are used to identify the market environment, with inward contraction indicating mean reversion or consolidation.

💡E-mini S&P

The E-mini S&P is a futures contract that represents one-fifth the value of a standard S&P 500 futures contract. It is popular among traders for its liquidity and lower margin requirements. Anthony Celli uses the E-mini S&P to illustrate his technical analysis and trading strategy in the video.

💡Simple Moving Average (SMA)

A Simple Moving Average (SMA) calculates the average of a selected range of prices, usually closing prices, by the number of periods in that range. In the video, Celli mentions using a 5-day SMA as part of his technical analysis to determine market trends and potential resistance levels.

💡Anchored VWAP

Anchored Volume Weighted Average Price (VWAP) is a trading benchmark calculated by taking the average price of a security over a specific period, weighted by volume, and anchored to a specific starting point. Celli uses an anchored VWAP from the opening day of the year to analyze market trends and volume in the new contract.

💡RSI (Relative Strength Index)

RSI is a momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100. It is typically used to identify overbought or oversold conditions. In the video, Celli uses RSI to gauge market momentum, noting that the RSI has moved from overbought conditions back into a more neutral range.

💡Trading View

Trading View is a popular charting platform and social network used by traders and investors to analyze markets and share ideas. Anthony Celli uses Trading View to perform technical analysis on the E-mini S&P, utilizing various tools and indicators provided by the platform.

💡TradeStation

TradeStation is an online brokerage firm that offers a trading platform for various financial instruments, including futures. In the video, Celli mentions TradeStation as a broker that can be connected to Trading View for trading futures, highlighting the integration between the platforms.

💡Volatility

Volatility refers to the degree of variation of a trading price series over time, typically measured by standard deviation. In the video, Celli discusses how the contraction of Bollinger Bands indicates decreasing volatility, suggesting a market environment of mean reversion or consolidation.

💡Micros

Micro E-mini futures are smaller-sized futures contracts that allow traders to participate in futures markets with less capital. Celli mentions using micro contracts to manage risk and maintain smaller positions overnight, as they provide a way to be involved in the market without the higher exposure of standard contracts.

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]

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