Model Positions Based on The Forecast/Trading Plan Published Before the Market Open – WED 08/08:


Medium-term/long-term Investors

Forecast/Trading Plan: (click here to read the full report/trading plan)

The trading plan published this morning stated: “The models are currently long – bought at 2862.25 – with the 10-point trailing stop’s trigger set at 2853.43.


For Wednesday’s regular session, the medium term models indicate holding the long unless it trips the stop trigger and gets sold. If the stop triggers, then the models would indicate going long ONLY above 2865. No bearish bias until all the way below 2820″.

Market Action and the Outcome:

Within the first hour of the market session, the index reached a session low of 2853.09 – just under half-a-point from the trailing stop’s trigger (no, we do not believe that there’s some market beast reading our forecasts and hitting the exact numbers our models forecast or hunting for our stops)! 


The medium term models thus sold the long position (entered at 2862.25) at 2853.25 for a loss of 9 points, and are currently flat (no positions). 

The models would go long on a break above 2865, or go short on a break below 2820.

(NOTE: Trailing stops work differently from traidtional stop-orders. If you are not too sure, please click here to read on the conceptual workings of a trailing-stop) 


Aggressive, Short-term, Intraday, or Professional Traders


The trading plan published this morning stated: “The models are currently long two positions – one bought at 2856.25 yesterday, Tue 08/07, and another bought at 2846.25 on Mon 08/06 – with 6-point trailing stops whose stop triggers are set at 2857.43.

For Wednesday’s regular session, the intraday aggressive models indicate holding the longs unless the index trips the stop trigger and they get sold.“

Market Action and the Outcome: 

The index opened the session at 2856.79 – below the 2857.43 trigger – thus tripping the trailing stop. Thus, the models sold the two long positions at 2857.25, with just one point profit on yesterday’s position, and 11 points profit on the position from Monday. 

The models are currently flat (no positions). As per the trading plan, the models would stay flat till 2835; below 2835, models would go short with a tight trailing stop (about 6 points). If flat and then the index breaks above 2865, the models would go long with a 5-point trailing stop.

(NOTE: Trailing stops work differently from traidtional stop-orders. If you are not too sure, please 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.

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(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.