first quarter wasn't bright for spx. but it can recover at moderate phase.
CME: Options on E-Mini S&P 500 Futures ( CME_MINI:ES1! ) Last week’s bloodshed of global financial market made history. Nearly all major asset classes fell into a market turmoil driven by tariffs and retaliations. Let’s focus on the US stock market: • Dow Jones Industrial Average dropped 7.76% in the week of March 31st to April 4th, making it the 4th worst weekly performance on record • S&P 500 slipped 8.77%, the 4th worst week in history • Nasdaq Composite fell 9.18%, the 2nd worst week • Russell gave up 9.34%, the 3rd worst week All four stock index futures were in negative territory year-to-date. On Sunday evening, E-Mini S&P 500 opened 178 points lower to 4,932, losing 17.1% YTD. All parties ultimately come to an end. After two years of double-digit gains, the unstoppable US stock market finally cracked. As more tariffs and retaliations are expected to escalate, I am afraid that we are only seeing the beginning, rather than the end. For stock investors, this is a good reminder of market risk, something we always talk about but seldomly pay attention to. The “return of investment” should be focusing on the repayment of your money, a safety issue. Only after that should we talk about the gain from the investment. It is a necessity to protect your portfolio to achieve long-term growth. Trading with Options on E-Mini S&P 500 Futures For investors with a diversified portfolio, Put Options on the E-Mini S&P 500 futures are effective and cost-efficient tools. Investors who long the stocks will lose money, should stock prices fall. Put options would gain in value, providing a hedge to the portfolio. The following illustration shows a hypothetical example, given: • An investor has a $250,000 portfolio holding a diversified pool of U.S. stocks • CME E-Mini S&P 500 futures ( NYSE:ES ) have a contract size of $50 times the index value • The June contract (ESM5) was quoting at 4,935 Sunday evening Friday, making the notional value of 1 contract $246,750, approximately equal to our portfolio value • Assuming the portfolio moves closely in line with the S&P 500 • The investor wants to limit the loss of his portfolio to 12%. If the S&P 500 index is currently around 4950, a put option with a strike price of 4350 would roughly correspond to a 12% decline Hedging trade illustration: • The investor buys 1 put option on the June futures with the strike price of 4,600 • CME quote on that Put option is 223. As the contract is $50 times the index, the premium upfront for one put option contract is $11,150 (223*$50), ignoring any commissions • The put premium is calculated as 4.46% of the $250K portfolio If S&P drops to 4,200 (-15.15%) by the end of April: • Without the put, the portfolio lost $37,879, assuming the same loss with the S&P • The 4600-strike put is now 400 points in-the-money • The investor sells the put and receives $20,000 (= 400 x 50) • The loss of portfolio will be 37879+11150-20000 = $29,029 • With an E-mini S&P put protection to mitigate loss from the stock portfolio, the investor lost 11.6% (= 29029 / 250000), which is 3.5% lower than the S&P loss and with the preset loss limit If S&P drops to 4,000 (-19.2%) by the end of May: • Without the put, the portfolio lost $47,980, assuming the same loss with the S&P • The 4850-strike put is now 600 points in-the-money • The investor sells the put and receives $30,000 (= 600 x 50) • The loss of portfolio will be 47980+11150-30000 = $29,130 • With an E-mini S&P put protection to mitigate loss from the stock portfolio, the investor lost 11.6% (= 29,130 / 250000) As we can see here, when the S&P falls sharply, the investor will be able to cap his loss to 11.6%. In a “protective put” strategy, we would consider the option premium an insurance contract for owning stocks. If the index rises, the portfolio return would be lowered a little because of the premium upfront, that is, the cost of insurance. However, the protection is a lifesaver if the index falls. Before jumping into action, the investor needs to run a correlation analysis using the daily value of the portfolio against the S&P 500 closing prices. Here is how: • Some trading software has correlation feature built in already • If not, pull 1-year daily portfolio balance and 1-year S&P closing prices, export them to Excel. Run correlation test with these two data series using Excel data analysis tool. • Alternatively, we could drop the data into ChatGPT and ask AI to do the work for us. If the correlation is greater than 50%, it means that S&P 500 is a good fit to hedge the portfolio. If it is not, we could try the correlation analysis using the other stock index closing prices, such as the Dow, the Nasdaq 100 and the Russell 2000. Then replace E-Mini S&P 500 futures with the stock index futures contract best fit the portfolio. Happy Trading. Disclaimers *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs https://www.tradingview.com/cme/
The announcement of new tariffs by the Trump Administration has unleashed a wave of uncertainty in global markets. With a 10% across-the-board tariff in the US, 20% for the European Union and up to 34% for China, these measures have ignited fears of stagflation in the US, which has repercussions internationally and directly affects investor confidence. Initial impact on the IBEX 35 Last Friday, the Spanish stock market suffered a historic fall, with the IBEX 35 losing almost 6% to around 12,400 points. This plunge, the worst recorded since the beginning of the covid crisis, wiped out tens of billions of euros of market capitalization, highlighting the strong impact of trade policies on the Spanish market. Impact on the banking sector The banking sector, a fundamental pillar of the IBEX 35, has been particularly hard hit. Entities such as Sabadell, Santander, BBVA, CaixaBank, Unicaja and Bankinter have suffered double-digit losses. Rising costs and pressure on profit margins have caused this sector to be severely impacted, reflecting the market's sensitivity to global instability. Persistence of the downtrend Although Friday's plunge had already set a negative precedent, the downward trend continued on Monday. Investors continue to reduce positions in risky assets, confirming the persistence of uncertainty. The lack of progress in international negotiations and the possibility of new countermeasures reinforced the pessimism in the market, keeping the IBEX 35 down at the opening of the session. Reaction in other markets and safe-haven assets The uncertainty generated by the tariffs has affected other financial indicators. Sovereign bonds are showing declining yields, which is evidence of the search for safer assets. Surprisingly, even gold-traditionally the safe haven of choice in times of high volatility-has lost ground, falling about 2.5% from its recent highs. Oil prices have also fallen, reflecting fears of a global recession and lower energy demand. Technical Analysis IBEX35 The momentum started on January 27th was stopped in March with two double tops. The second one lateralized the index and after the news caused by the tariff wave, on Friday April 4 a death cross was managed that has led the index the same day in a purely bearish session. The closing of the session took place in a context of a 4-hour candle with a lot of wick, bringing the chart closer to 1-hour candles, the last hour of the session a bearish gap was managed that left the price at the lows of the whole year at 11,930 points. The 12.00 zone seems to have acted as a temporary brake. The RSI in Friday's session moved into very high oversold territory, reaching 14.53%. The Spanish premarket hours indicate that the index could be trading around 11,963 points. The POC (Point of Control) zone of the previous weeks is located at 13,277 points. If the index holds its price at the current supports we could see a recovery in the direction of the support lost on Friday at 12,518 points in the current week due to the excessive news depreciation of the index. If the first support lost is recovered the second zone would be 12,760. If this price does not hold there could be the possibility of seeing the lows of 11,294 points. Conclusions and outlook The continued decline of the IBEX 35 underscores the interconnectedness of markets in a global context marked by trade tensions. The impact of the tariff “whiplash” remains profound, and as developments in the negotiations and possible international countermeasures are awaited, investors are preparing to face weeks of high volatility. The prospect of a prolonged economic slowdown remains, forcing the Spanish market to adopt an increasingly cautious stance. ******************************************************************************************* The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and such should be considered a marketing communication. All information has been prepared by ActivTrades ("AT"). The information does not contain a record of AT's prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acing on the information provided does so at their own risk.
Gold has broken below its channel and is testing the 200 EMA near $2,991. Resistance at $3,075–$3,087 now caps upside. Breakdown below $2,972 exposes $2,926. ⚠️ Watch for sustained move below $2,972 to confirm bearish continuation. Recovery above $3,075 could flip bias near-term bullish.
On Monday (April 7th) during the Asian trading session, the price of gold once dropped below $2,990, but then rebounded, reducing the extent of the decline. The selling pressure intensified due to the trade war initiated by US President Trump. Alarmed investors flocked to the US Treasury bond market out of concerns that Trump's trade war could trigger a global economic recession. For now at least, they are ignoring the risk that the same punitive tariffs might trigger another round of inflation. After the US government bonds rose and pushed the yield of two-year Treasury bonds to the lowest level since 2022, traders are preparing for further upward movements and believe that there is a greater possibility that the Federal Reserve will adopt the most aggressive interest rate cut measures to prevent an economic standstill. The daily chart of gold shows that the Relative Strength Index (RSI) has declined from nearly 80, which was reached on Thursday, towards 50. This indicates that the recent decline in the gold price is not just a technical pullback. Since gold opened lower today and directly dropped, continuing the downward trend of Friday's decline, we need to consider an issue now, that is, whether there will be consecutive daily declines. From the daily rhythm, we can see that the position of the high point has been continuously decreasing. This means that after encountering resistance at the vertex resistance level of the three-point line, it is very likely to form a secondary inflection point for the downward trend! From the 4-hour analysis perspective, today's short-term resistance above is at the level of 3,055, and the support below is at the level of 3,000 to 3,008. The trading strategy for gold: Place a short order when gold rebounds to the level of 3,050 to 3,060, with the target at the level of 3,015 to 3,020. I will share trading signals every day. All the signals have been accurate for a whole month in a row. If you also need them, please click on the link below the article to obtain them.
As indicated in prior posts, XRP is now approaching the liquidity target levels at 1.55-1.60 levels as part of a final liquidity run. Possibility exists for extended sell wave as low as 1.06 (worst case scenario imo) but most likely scenario is that 1.35-1.55 will be the zone in which the final low on the consolidation structure is formed. The next move is gearing up to be explosive towards 10$ & then on towards 100$ range once 10$ fails to hold as resistance. I am convinced we will witness progress on towards 500's within several years (assuming comprehensive integration into financial system etc)...time will tell if we get into the 1,000's!!! Hope this helped some of you gain (re-)entry at greater discounted levels!!
Peter Diamandis, a futurist with degrees from both MIT and Harvard, has spent much of the past two decades evangelizing a vision of an “abundant future” driven by exponential technologies that will lengthen our lives. The serial entrepreneur and founder of organizations like the XPRIZE Foundation and Singularity University has also cultivated close ties with […]
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