Here are two charts for the S&P 500 E-Mini. These charts look extremely bullish, in my opinion. The first chart is a daily S&P 500 E-Mini with the 200-day moving average. This is a good indicator for the stock market. Above the 200-day moving average, the market is good. Below that, not so good. In my opinion, new contract highs lie ahead sometime in the next five weeks. 

The second chart is a weekly S&P 500 E-Mini showing a reversal up. This is rare, in my opinion, and when it occurs, take note. I predict S&P 500 E-Mini will go to 6300 even. 

Here is a simple options strategy. Buy the August S&P 500 E-Mini Monday Week One weekly 6300 call for a premium of 4300 ($2,150). These options expire on August 4. This gives you coverage through the July 3 and August 1 unemployment reports. The markets and Federal Reserve pay attention to these important reports. In my opinion, earnings and interest rates also drive the stock market and earnings are looking good.

The fly in the ointment is tension in the Middle East. According to Daniel Ive, an analyst at Wedbush Securities, there could be more volatility in the stock market this week. But, he added, markets may view the threat is gone, leaving  “the worst in the rearview mirror.” 

This is a very conservative approach. S&P 500 E-Minis are very active. You can get in and out at any time. Please call me for further discussion. 

Stephen Davis
Senior Market Strategist 
Walsh Trading

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