“Stay Patient and Be Safe – Don’t Play with Choppy Markets” – Our Headline Published Yesterday BEFORE the Market Open Still Applies to Today!
Our S&P 500 Forecast’s aggressive intraday models published the following trading plan yesterday – before markets opened: “If the index crosses above 2886 during the regular session, the models indicate going long with a 5-point trailing stop; if crossing below 2876, going short with a 7-point (different from the long) trailing stop” (click here to read the full report and/or to verify this claim).
The index broke through the 2876 level and triggered a short position which was ridden all the way down throughout the session. Currently the models are sitting on a significant level of profits (96+ points) on this position.
Model Biases/Outlook:
Now that the range levels we have been forecasting is broken out of, our models have adapted a cautiously bearish bias, which would likely be confirmed to an outright bearish bias with a daily close below 2766. This concludes the “neutral” bias adapted by our models on 09/27.
No bullish bias in sight until a daily close above 2877.
A Brief Trace Back of The Current Bias/Outlook
On Friday, 09/07, our models had entered an “indeterminate” state and had negated their previous bullish bias, but had not adapted a bearish bias, yet. After reiterating this indeterminate bias for seven consecutive days, our models adopted a “slightly bullish” bias on Wed 09/19.
For Mon, 09/24, we continued this bullish bias, with a cautious stand about the gap-up on Thu 09/20. On Monday this gap-fill was attempted by reaching within 0.13 points – our models wanted to see it filled fully and published caution to bulls until that is seen. On Wednesday, 09/26, this gap was filled and the market closed down.
Thursday, 09/27, our models had negated the bullish bias and adopted a neutral bias between 2933 and 2887, which is now being updated to 2920 and 2880. After reiterating this neutral bias for for thirteen days in a row till yesterday, our models have now adapted a “cautiously bearish” bias. This caution is in view of potential spikes up in a whipsaw mode, but the medium term bias is clearly bearish.
Trading Plans for THU, 10/11:
Medium-term/long-term Investors
The medium-term models have closed out the last position (a long) for a 12-point profit last week, opened at 2913 on Wed, 09/19 and have been flat since then (no positions).
With a daily close below 2880, our medium term models are indicating going short today on a break below 2770 during the regular session. If the index gaps down, models indicate waiting for the gap filled and not chasing the short entry down.
Aggressive, Short-term, Intraday, or Professional Traders
Our aggressive intraday models are short from the 2876 index level from yesterday. Models indicate riding this short with a wide 23-point trailing stop. If the stop is hit and the position closed, models would remain flat for the rest of the session.
Remember that a “trailing stop” works differently from the traditional stop-loss order. Please bear in mind that the trailing stop’s trigger level would keep changing throughout the session (click here to read on the conceptual workings of a trailing-stop).
IMPORTANT RISK DISCLOSURES AND NOTICES – READ CAREFULLY:
(i) This article contains personal opinions of the author and is NOT representative of any organization(s) he may be affiliated with. This article is solely intended for informational and educational purposes only. It is NOT any specific advice or recommendation or solicitation to purchase or sell or cause any transaction in any specific investment instruments at any specific price levels, but it is a generic analysis of the instruments mentioned.
(ii) Do NOT make your financial investment or trading decisions based on this article; anyone doing so shall do so solely at their own risk. The author will NOT be responsible for any losses or loss of potential gains arising from any investments/trades made based on the opinions, forecasts or other information contained in this article.
(iii) Risk Warning: Investing, trading in S&P 500 Index – spot, futures, or options or in any other synthetic form – or its component stocks carries inherent risk of loss. Trading in leveraged instruments such as futures carries much higher risk of significant losses and you may lose more than you invested in them. Carefully consider your individual financial situation and investment objectives before investing in any financial instruments. If you are not a professional trader, consult a professional investment advisor before making your investment decisions.
(iv) Past performance: This article may contain references to past performance of hypothetical trades or past forecasts, which should NOT be taken as any representation or promise or guarantee of potential future profits. Past performance is not indicative of future performance.
(v) The author makes no representations whatsoever and assumes no responsibility as to the suitability, accuracy, completeness or validity of the information or the forecasts provided.
(vi) All opinions expressed herein are subject to change at any time, without any notice to anyone.
