Post-Market Recap for The Futures Playbook - 15 Nov 2024

Today’s trading strategy focused on preparation for the impacts of high-interest-rate expectations, as reiterated by Fed Chairman Jerome Powell. Our analysis centered on major futures contracts, leveraging bearish setups on equities, particularly growth-sensitive indices, while positioning gold and crude oil based on economic uncertainties. Here’s a breakdown of how each major futures contract performed against our expectations:

YM=F (Dow Jones Futures)

• Outcome: Successfully hit the bearish target. The Dow faced significant downward pressure, closing at 43586, down 315 points.

• Insight: Powell’s comments on keeping rates high continue to weigh on growth-sensitive indices. The trade benefitted from a bearish setup, as expected.

• Rating: 9/10

NQ=F (NASDAQ Futures)

• Outcome: Bearish trade performed strongly, with NASDAQ closing 508.5 points lower at 20503.25.

• Insight: The tech-heavy NASDAQ, sensitive to high-rate environments, saw consistent selling. This aligns well with our bearish scenario due to tech’s vulnerability in such economic conditions.

• Rating: 9.5/10

ES=F (S&P 500 Futures)

• Outcome: S&P 500 futures closed 78.25 points lower, reaching 5900. The bearish scenario hit its target.

• Insight: The broad market weakness, driven by rate-related fears and disappointing earnings, supported our bearish stance.

• Rating: 8.5/10

RTY=F (Russell 2000 Futures)

• Outcome: The Russell 2000 hit the bearish target, closing at 2316.7, down 32.9 points.

• Insight: Small caps remain vulnerable in a high-interest environment. The rate concerns provided ideal conditions for this bearish trade.

• Rating: 8/10

GC=F (Gold Futures)

• Outcome: Gold futures saw a minor pullback, closing at 2567.4 with a decrease of 5.5 points. The bullish target was not fully achieved.

• Insight: While gold’s safe-haven appeal was strong, it couldn’t entirely offset profit-taking at higher levels. Still, the overall bullish thesis remains valid.

• Rating: 6.5/10

CL=F (Crude Oil Futures)

• Outcome: Crude oil closed lower at 66.95, aligning with the bearish scenario.

• Insight: Oil prices fell due to demand concerns amid a slowing global economy and rate pressures. This trend validated our bearish stance.

• Rating: 8/10

Summary

Today’s trading results reaffirm the importance of preparation in volatile conditions. The bearish trades on indices performed exceptionally well, demonstrating the impact of Powell’s comments on high-rate expectations. The strategy of aligning with macroeconomic themes allowed us to effectively manage risk and capture opportunities across major assets.

Overall Day Performance: Strong alignment with the bearish market sentiment led to successful trades in the equity futures markets. As we close the day, it’s clear that preparation, discipline, and a structured approach remain the keys to mastering volatile market conditions.

Reflection and Takeaways:

• Discipline: Sticking to the strategy and adjusting stops helped mitigate losses on trades like gold, which didn’t fully reach the target.

• Preparedness: Anticipating the effects of macroeconomic news allowed us to capitalize on significant market movements in equities.

• For Tomorrow: Monitor further economic indicators, as ongoing high-interest-rate expectations may continue to pressure equity markets while supporting safe-haven assets like gold.

Today's results affirm the power of strategic foresight and risk management, keeping every trade a step forward on the path to market mastery.