S&P Futures Trading with John Carter

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Next Stop S&P: 1200

In tonight's video, I continued a trade from the free video. The high today in the S&P was 1187. With the market at 1181.50, I predicted a move higher into the close. I was long 40 at 1180. The only thing that worried me was a -1200 reading in the ticks. This told me there was some real selling going on. The ticks are what matter; if they hang out above zero, sellers frighten and the market moves higher. I knew if we broke the high of 1187 we could rally into the close. As the market moved higher I set a couple stops to lighten up and lock in profit. If the market made new highs, I sought to get more aggressive as it might signal a short squeeze. Trading is about risk management. When the ticks move lower, I look to sell. Minutes from the close, we made fresh contract highs. I hadn't gotten too aggressive about trailing stops because I knew if the ticks got below zero there was plenty of time to get in. If we held zero and bounced, I was good. If not, it was time to get out. As the ticks gradually moved lower, I got rid of half my position. When the market closed I went flat. The trade was a good case study: a few head-fakes along the way, but ultimately I held my ground and turned a profit.

Some key support and resistance levels have been broken in the S&P: 1150 and 1175. Next is 1200. I think we hit it. Don't discount the possibility of a surprise move to 1225 as nobody is expecting it. Exercise caution on the short side. It has been a tremendous rally but I think there is still more left.

The Dollar index was the story of the day, coming down hard and farther than I thought. But no danger of reversing the trend. It could move far down as 76.70 before firming up again. A continued move lower helps push the S&P to 1225.

The rally in AUD/JPY means hedge funds are putting risk back on the table and stock markets, as a result, should go higher.

AMZN continues to beat the stock market. If you want to be in stocks, this is kind of stock you want to be in.

I think the stock market pushes farther than we thought. Look for at least 1200, potentially 1220 before moving lower.

John Carter is the author of Mastering the Trade and co founder of Trade the Markets. John Carter has been featured on CNBC, Bloomberg, Fox business channel, tastytrade radio. He is a contributor to thestreet and SFO magazine.

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