Next week’s major market ranges from Trevor Smith.
Major Market Ranges for Week of Jan. 5: Sideways Trades Begin 2020
S&P 500 Futures are in fair valuation by a combination of static and dynamic mathematics in 2020 at 3200-3600 level; projected high range 3650-3791 may print before the projected low range 2850-2500, which is under the 2796 yearly pivot yet over the 2160 yearly support. Traders can adjust ranges.
In this closing week, nine of 10 projected weekly ranges printed as of Thursday night with other range projections close; both option spreads’ underlying symbols traded under chosen strikes in winning directions. The 3215 target, derived from being a one-standard deviation move, was revisited several times. Unofficial trades succeeded similarly, despite countertrade quality.
Next Week’s Predicted Ranges
E-mini S&P 500
High Range 3288-3265; Low Range 3225-3205 (3060 outlier)
Buy weekly 3245/40 put spread based on bearish market internals, Implied Volatility%, 3215 is one-standard deviation move target again this week.
Japanese Yen
High Range 9311-9299; Low Range 9249-9229
No official trade. Rationale: range math bearish but weekly chart breakout over 20-week & 50-week moving average simultaneously an >80% win rate bullish next four weeks. Bullish-skewed Option Chain Delta values favor rally.
Euro FX
High Range 1.128-1.124; Low Range 1.119-1.115
No official trade, but breakout closure >50-week moving average was bullish toward next higher moving average cluster (1.135); 1.129 higher printed. Inverted hammer weekly chart is a no-momentum, so-so sell signal.
Gold
High Range $1567-$1550; Low Range $1530-$1515
No official trade: $1,540/35 are the weekly pivot and projected range midpoint below for next week, but I find no reasons other than overbought Fisher oscillator to short sell/trade down to the 40s- in a market making/retesting higher highs.
Crude Oil
High Range $65.13-$62.73; Low Range $62.66-$61.02
No official trade. Some resistance exists at $63 per barrel, but my longstanding opinion has been the narrow range is too strong for too long to do anything but wait to join the massive breakout, if not too fast/wide (join >$7690;<$4015).
(Note: This article is published mid-day on Fridays and focuses on weekly options expiring the following Friday but may include monthly options or 2-week calendar/diagonal option spreads at times. I consider my week’s range accuracy from Fri. a.m. publishing until next Fri. a.m. as Trevor’s week for purposes of being aligned with potential weekly option trades placed Fri-Tue.
Last Week’s Predicted-Versus-Actual Ranges
E-mini S&P 500
High Range 3270-3251; Low Range 3222-3210 (3060 outlier)
Actual: 3263-3213
Buy weekly 3240/35 put spread on candlestick signal, Implied Volatility%, range midpoint, 1 Standard Deviation move to target: 3215; trade small size
Japanese Yen
High Range 9202-9187; Low Range 9164-9148
Actual: 9295-9161
No official trade. 9175 is the weekly pivot and >current price, so a countertrend bounce long call spread could be a quick trade; or, join narrow-range trending pivot math if a profitable wave 3 down breaks out
Euro FX
High Range 1.130-1.124; Low Range 1.121-1.118
Actual: 1129-1121
No official weekly trade, but breakout closure >50-week moving average is bullish toward next higher moving average cluster (1.135) considering Feb. expiration options
Gold
High Range $1531-$1522; Low Range $1504-$1495
Actual: $1546-$1513
In sideways-reversals weekly range math, sell a $1520/25 weekly call spread near coming highs down to the 1 Standard Deviation target & weekly pivot at the ’02s-05s if price gets/hovers there at the 20-week moving average $1498 support.
Crude Oil
High Range $63.12-$62.01; Low Range $60.87-$60.10
Actual: $63.84-$60.63
No official trade. Weekly pivot/range midpoint are lower, $6115, if a short call spread begs, but Monthly chart’s bull kicker candle over the 20-month moving average implies $65/barrel above with monthly-chart professional participants!
See More analysis from Trevor here
Note: Nothing herein shall be construed to be specific financial advice. While reflecting my best good-faith efforts to forecast markets, no guarantees of accuracy are made from my range statistics, aggregate statistics, frequentist interpretations, and pivot math from hand calculations. I am a registered newsletter CTA, and all required disclaimers apply. Trade at your own risk with money you could discard/not miss.
