|
How to trade the S&P 500
Our service is really about three things: Pivots, Direction and
Absolute levels (amplitude). Therefore, it is really important to
identify the high and low pivots (in time, not price) to see where the
trends will change. Our forecast will show you the high or low pivot
point. Another way to trade is to take shorter trades that set-up
where the market diverges from the correct direction (based on the
pivot to pivot analysis described above). Simply trade in the
direction of the forecast where either a) the market has retraced away
from the forecasted trend or b) where it has taken out a previous low
or high from the previous day (or some other significant level). Keep
in mind, lower risk strategies are often associated with making trades
at price levels at or near forecasted weekly pivots and not in the
middle of a pivot cycle. Our method of forecasting system is very
complex, but in a nutshell we calculate different cycles in the market
and our computers spit out the forecast for the following week. These
forecasts are best suited for swing trading and even daytrading. The
Standard and Poors 500 (S&P 500) is an index made up of five hundred
different stocks. Each is selected for liquidity, size, and industry.
The index is weighted for market capitalization. The S&P 500 is the
benchmark of the overall market, and frequently used as the standard
of comparison in terms of investment performance.
The S&P 500 index was created in 1957, although it has been extrapolated
backwards to several decades earlier for performance comparison
purposes. This index provides a broad snapshot of the overall U.S.
equity market; in fact, over 70% of all U.S. equity is tracked by the
S&P 500. The index selects its companies based upon their market size,
liquidity, and sector. Most of the companies in the index are solid
mid cap or large cap corporations. Like the Nasdaq Composite Index,
the S&P 500 is a market-weighted index. Most experts consider the S&P
500 one of the best benchmarks available to judge overall U.S. market
performance.
CME E-mini® S&P 500® futures provide investors with an innovative tool
for accessing and managing risks on stock market investments. Fully
electronic and 1/5th the size of a standard CME S&P 500® futures
contract, it closely tracks the price movements of the S&P 500® Index,
the premier benchmark of stock market performance. More than 1 million
contracts traded on average per day in 2006, making it one of the most
highly-traded futures contracts in the world and reinforcing CME’s
position as the world’s leading provider of stock-index futures.
- Fast, efficient way to trade the benchmark S&P 500 Index (and
the underlying 500 large-cap U.S. issues) with a single contract
- Smaller contract well-suited for a broad range of individual and
institutional customer needs
- Substantial liquidity and tight bid/ask spreads
- Electronically traded on the CME Globex® platform,
offering speed, reliability, anonymity and trading around the clock,
around the world
- Accommodates a variety of strategies such as hedging to protect
against adverse price moves, spreading with other stock-index
futures and gaining broad market exposure
- Level playing field from open, fair and transparent markets
|
