Earnings to Continue to Feed the Bulls to Further Strength?

Out S&P 500 Index forecast for Tuesday (07/23/18) – published Monday night – stated: “For Tuesday 07/24, if the index closes above 2816, it would indicate recovering bullishness in the market” (click here to read/verify this statement). The index closed at 2820.40 – above the 2816 level mentioned – and has set off another indication of the bulls retaking the charge after spending a few days consolidating their recent gains. 

Model Biases/Outlook: 


After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18 when it closed at 2759.82! Since then, our models have been consistently forecasting bullish strength and are yet to flash any concerns about any bears in sight, and we reiterate that stand for the 19th consecutive day!

Indications are for continued bullishness in the markets while the index is above 2810. For Wednesday 07/25, if the index closes above 2830, it would indicate accelerating bullishness in the market. If the index closes below 2810, it would indicate consolidation of the bullishness. A close below 2792 is needed for the bias to shift to bearishness. 

Trading Plans for WED 07/25/2018:


Medium-term/long-term Investors


The medium-term models started the Monday’s session flat (no positions) and did not open any new positions on Tuesday, waiting to see the close of the Tuesday’s session.     

For Wednesday, medium-term models indicate going long at the open if the open is above 2816 or going long on a break above 2816 if the open is below 2816. A trailing stop of 8-12 points (depending on your individual trading style and risk appetite) in indicated by the models. (click here to read on the conceptual workings of a trailing-stop)


A break below 2792 will trigger the models to go short, with an initial target of 2775 and then the 2750-2745 region, with an initial trailing stop of 8-12 points. 

Models to stay flat while the index remains between 2816 and 2792. 

Aggressive, Short-term, Intraday, or Professional Traders


As detailed in the Intraday Alert published Tuesday morning (click here to refer to the full text of the alert), the agressive, short-term, intraday models went long (bought) at the index level of 2820.75, with a 6-point trailing stop. With the session’s high at 2829.99, the stop trigger was anchored to 2823.99, which was filled in the afternoon session. The models did not initiate any new positions and ended the session flat (no positions). 

For Wednesday, these models indicate going long while the index is above 2816. A cross below 2810 during the regular session would trigger the models to go short (short-sell). 

A trailing stop of 5-8 points (depending on your individual trading style and risk appetite) is indicated by the models. (click here to read on the conceptual workings of a trailing-stop)

IMPORTANT NOTICES & DISCLAIMERS – 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 a
re 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.