Consecutive Three Days of Tug-of-War! Advantage Bulls!


Our S&P 500 Index forecast for Friday (07/21/18) – published Thursday night – stated: “Our models indicate that, tomorrow (Friday, 07/20), the index has to close below 2804 or above 2810 for any directional bias to develop; if not, then the tug-of-war would likely continue into the next week!”. 

Staying true to the story of the last many days, the index did indeed track this – and registered Friday’s session high at 2809.70 – just 0.30 points under the upper bound we indicated!! (click here to read this report/verify this claim). Also, the index closed at 2801.83 – about 2 points below the lower bound mentioned. In addition, the day’s range confied to within the broader 2815-2790 range on Friday.

Our S&P 500 Index forecast for Monday (07/23/18) – published Sunday night – stated: “Indications are for a range-bound, choppy trade while the index is within the key range of 2815-2790” (click here to read this report/verify this claim). Monday’s session confined to a high of 2808.61 and a low of 2795.14. The index closed the session within the range, at 2806.98, indicating the continuation of the “tug-of-war” between the bulls and the bears for a second day, albeit with an indication that the bulls are proving their slight dominance over the bears in that the bulls are able to defend their recent gains for the last three days of tug-of-war.  

Model Biases/Outlook: 


After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18! 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 18th consecutive day!

Indications are for a range-bound, choppy trade while the index is within the key range of 2816-2792 (note the change in the range bounds). For Tuesday 07/24, if the index closes above 2816, it would indicate recovering bullishness in the market. If the index closes below 2800, it would indicate weakness in the bulls. A close below 2792 is needed for the bias to shift to bearishness. 

Trading Plans for TUE 07/24/2018:


Medium-term/long-term Investors


The medium-term models started the Monday’s session flat (no positions) and did not open any new positions.    

For Tuesday, medium-term models indicate 2816-2792 as the pivot range. A close above 2816 on Tuesday is needed for the models to go long.  


A daily close below 2792 will trigger the models to go short, with an initial target of 2775 and then the 2750-2745 region. 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)

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

Aggressive, Short-term, Intraday, or Professional Traders


The agressive, short-term, intraday models started the Monday’s session flat (no positions). The forecast trading plan for Monday stated: “Aggressive short-term/intraday models indicate bullish bias while above 2810. No short trade indicated until all the way below 2793.” (click here to read this report/verify this claim)  

Monday’s market action confined itself to right within these two levels of 2810 (session high 2808.61) and 2793 (session low 2795.14)! Consequently, the models did not open any positions on Monday and ended the regular session flat (no positions).  

For Tuesday, these models indicate 2808-2804 as the pivot band. A cross above 2808 during the regular session would trigger the models to go long (buy), while a cross below 2804 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) in 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 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.