Stay With All Trends Using the S&P Futures Multiple Time Frame Analysis
The multiple-time frame analysis of the S&P futures is an integral part of the Viper Hot Stocks Daily Alert Service. The signals are generated on weekly, daily, and 260-minute data. The signals are based on a combination of my favorite technical tools along with insights from the sophisticated analysis of the price action.
They have been programmed and designed into the Thinkorswim trading program (TOS) by Jerry A, a friend and student of several years. Even though Jerry started with little knowledge of technical analysis his sharp analytical skills, intuitive mind, undying curiosity, and programming ability have made the trading system a living reality. Jerry and I have collaborated to create a system where price action and signals can be followed using TOS. We continue to work on and refine the system to improve the accuracy of the signals as well as to make it as user-friendly as possible. Significant changes have been made that will be reflected in future articles. Subscribe now here
Signals from all time frames generate multiple target levels as well as a reversal point which if triggered on a weekly, daily, or 260-minute basis reverses the prior signal. In addition, the daily and 260-minute signals can be supported or not supported by the Stochastics Confirmer on the next longer time frame.
This will be further explained in the following examples. But for example, if the 260-minute system is positive, but the daily is negative, then one should commit to a smaller position than if the two different time frames were confirming each other. If the 260-minute should then turn negative then the daily and 260-minute analysis would be in agreement which may increase the odds that a directional trade will be profitable.
I want to fucus first on the 260-minute analysis since it is the first data series to indicate a change in trend. Most of the details on the weekly and daily charts are similar to those used on 260 min charts but on different time periods. Using the extended hours this table represents starting times ET when a new 260-minute bar is generated.
This chart covers the period from March 10, 2022 to April 3, 2022. These charts have plenty of information and understanding as well as explaining it will be an ongoing process. Point 1, highlights a sell signal at 9:40 AM on March 11th. The open on the next bar was 4230.75 which would be the entry level for the short trade.
The initial red zone at 4234.81 represents the reversal price of the new signal. The red zones provide the projected downside targets which in this case were 2ATR at 4149.83 and 3ATR at 4107.35. The Stochastics Confirmer, is derived from George Lane's stochastics, had turned negative but it was not extremely overbought as it was below the upper LRC
The position size is important in any trading system and it is suggested that if possible you establish a multiple position that ideally can be divided into four parts. Once the 2ATR target is hit one should sell 50% of the position. If the 3 ATR target is reached then another ¼ of the position should be closed out. A stop is then used on the remaining position or could be closed out at the 5ATR target.
This money management is important since targets are not always hit and this allows you to reduce your exposure which is especially important in volatile markets. In this example, the ATR signal was met before midnight on March 15th as the low was 4129.50.
A new positive reversal was generated (point 3) with the close at 4196 on March 15th as the remaining short position was closed out at the next bar open of 4196 as a new long position was established. The targets in green were 2ATR at 4278.76, 3ATR at 4322.13 and 5 ATR at 4408.88. The initial close-only stop was 4147.13.
The new positive 260-minute reversal came with the 260 minute Stochastics Confirmer below the LRC and very oversold. This increases the strength of the signal. The Stochastics Confirmer based on the daily data was also positive and confirmed the signal as noted by the arrows (point 4). In a subsequent post on the system I will point out that the weekly analysis at this time was negative as it had been since early in January.
The 2ATR at 4278.76 was exceeded on the evening of the 16th as the 1:00 AM bar had a high of 4303.75. The stop has been raised with prices and by the next morning at 9:40 AM had risen to 4219 which was above the initial entry-level. The 2ATR at 4322.13 was exceeded early on March 16th. By the afternoon of Friday, March 18th the extended 5 ATR target at 4408.88 was exceeded with a high of 4465.75. The rally continued early that week as it reached 4514.75 on March 22nd, point 5.
The March 23rd close below the reversal point at 4472 (point 6) triggered a new short position on the 9:40 AM open at 4471.75 with a 2ATR target at 4423.31. The StochConfirmer, based on the daily data, was positive when the negative signal was generated so it was not confirmed. ES had a low of 4444.75 later that day. The initial reversal level was 4521 but by the next day it had moved down to 4483.31.
A new positive signal was generated at 2:00 PM on March 24th at 4491.25 (point 7). The signal came when the StochConfirmer was just below the midline (dashed white) but well above the extreme oversold level. Also the SochConfirmer, based on the daily data, was overbought and negative so the new positive signal was not confirmed.
The 2ATR target at 4533.54 was reached on the morning of March 25th. The 3ATR at 4558 was exceeded on the afternoon of March 28th as there was a high of 4572.25 (point 7b) . The 5ATR at 4606 was exceeded on March 29th (point 7c) as later that day it reached a high of 4631.
ES traded sideways to lower the next day but did not close below the reversal at 4597 (dashed green line) until early on March 31st at 4579. The daily StochConfirmer was negative so the 260 min negative signal was confirmed. The 2 ATR target at 4553.54 and the 3ATR at 4535.67 were exceeded later that day as the low was 4526.23. The April 1st low was 4501.25 so the 5ATR target at 4493.92 was not hit.
In the next installment I will look at the daily and weekly signals for the Viper Hot Stocks Daily Alert service and I will add the results from the 260 min system for May 2022 soon. Of course past performance is no guarantee of future results.
Questions and comments are always appreciated and I will be doing ZOOM sessions in the future. Email me at firstname.lastname@example.org with S&P in the subject line.