Comparing Market Volatility to 2018, ES Daily Chart & Trading Levels 3.11.2020

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Dear Traders,

The recent volatility is of historical proportions!

Today we saw the bond market lose over 7 full points!!

The Dow was down approx. 2000 points yesterday and is up over a 1000 today…..

I have a few points to make:

1. Take a look at the below chart from Feb. 2018 of the mini SP, last time I remember volatility close to what we are seeing ( FYI the VIX high back then was close to 30…we saw VIX trading over 50 this time around) and you will see that the moves are not a straight line….don’t get over excited if you are long and market bounced your way or vise versa if you are short and the market is limit down….this volatility will play both sides and in MY OPINION this is not a market to just buy and hold using futures….You need to be able to react and adjust positions according to market action and sentiment.
2. Learn to reduce trading size. Perhaps trade smaller contracts like the micros.
3. Understand that loses are part of trading and this is definitely not a good time to “fight the markets”.
4. Focus more on risk management and ways to protect certain positions as needed.
5. Survive to trade another day.
6. Tomorrow I am going to look at some charts from 2008…..

LIMITS guidelines visit: https://www.cmegroup.com/trading/equity-index/faq-sp-500-price-limits.html

Overnight limit, can’t trade below but can trade above.

-5%

Intra day

-7% Trading Halt 15 mins

-13% Trading Halt 15 mins

-20% Closed for rest of day

Due to the start of Daylight Savings Time starting in the U.S. on March 8 (this weekend), and British Summer Time not starting until March 29, European markets will open and close one hour later in the US during this time. Also, Coffee, Cocoa, and Sugar will open an hour later, but will close at their normal times.

Click on image to enlarge ES chart from 2018 and the VIX back then only reached 30…VIX traded above 50 yesterday….

Good Trading

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Futures Trading Levels

03-11-2020

Economic Reports, source: 

Order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading.