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What Are the Best Times to Capitalize on E-mini S&P 500 Price Action?

| August 24, 2021 | By

In the markets, timing is everything. Successfully trading U.S. equity index futures is no different―understanding when to trade and when not to is the name of the game.

Unfortunately for the modern trader, the near-24-hour electronic session has made timing the market a more nuanced process. Read on to learn more about the premium hours for banking profits from E-mini S&P 500 price action.

What Are the Best Times to Trade U.S. Equities Index Futures?

The E-mini Dow, E-mini S&P 500, and E-mini Nasdaq feature the following attributes:

  • Liquidity: Liquid markets offer active traders optimal depth, consistent order flow, and steady participation. The result is greater trade efficiency courtesy of reduced slippage, tight bid/ask spreads, and fluid price action.
  • Volatility: Volatile markets give participants many trade setups and the opportunity to realize large profits. Although being active during extreme volatility certainly adds risk, engaging markets that exhibit robust price action is generally beneficial.

CME Globex equities index futures are open for business on a 23-hour, five-day basis. The markets commence trade on Sunday evenings at 6 p.m. EST and close Fridays at 5 p.m. EST. Each day features a one-hour maintenance period from 5-6 p.m. EST. The one-hour break is used to update servers, manage open positions, and ensure that maintenance margin requirements are being met.

Given the wide 23-hour-per-day trading range, finding the best times to cash in on E-mini S&P 500 price action can be a challenge. However, understanding three key parts of each trading day’s anatomy—the U.S. premarket hours, the Wall Street open, and the Wall Street close—can help.

U.S. Premarket Hours: 7:30-9:30 a.m. EST

The U.S. premarket hours are an important time for equities traders. Typically, participation begins to pick up as market participants return from the U.S. overnight session.

One aspect of the premarket hours to be aware of is the scheduled release of official U.S. economic reports. Items such as GDP, CPI, and non-farm payrolls (NFP) are normally released at 8:30 a.m. EST.

Heavy volatility can ensue, frequently leading to chaotic E-mini S&P 500 price action. Ultimately, news releases can bring whipsaw market conditions, making the U.S. premarket hours a difficult period to master.

Wall Street Open: 9:30-10:30 a.m. EST

The Wall Street opening bell or “cash open” stimulates a flurry of activity, heavy trading volumes, and extreme volatility in U.S. equities markets. However, the historical tendency is for price action to quickly calm and order to return to the markets.

In the minutes immediately following the 9:30 a.m. EST bell, exercising caution is a good idea. After that, the forthcoming hour features strong market depth and steady volatility—two beneficial elements for E-mini S&P 500 traders. By far, the hour following the 9:30 a.m. EST Wall Street open is one of the best times to trade U.S. equity index futures.

Wall Street Close: 3:30-4 p.m. EST

Every business day, the closing bell rings on Wall Street at 4 p.m. EST. However, the futures markets and extended equities hours remain open for trade. In the case of the E-mini S&P 500, the action rolls on until the 5 p.m. EST Globex electronic close.

The minutes leading up to the traditional 4 p.m. EST close are key for E-mini S&P 500 price action. Participation grows as day traders liquidate open positions, scalpers trade on second-by-second time frames, and overnight traders enter the market. The result is outstanding market depth, enhanced volatility, and great short-term trading conditions. If you’re a momentum trader or scalper, the pre-close period from 3:30-4 p.m. EST is certainly worth a look.

Using Technical Analysis to Profit from E-mini S&P 500 Price Action

In the contemporary U.S. equities marketplace, technical analysis is a popular way to harvest profits from E-mini S&P 500 price action. All one needs are liquid and volatile market conditions—a strong technical trading strategy can do the rest!

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