Fed Fight Fatigue/Reality to Set In Soon?
Markets are still trying hard to get unstuck from the Fed Fight and move on in some clear direction. Despite the apparently big moves and volatility and Fed events, the markets are just where they were in 2nd/3rd week of January! Double check the S&P 500 Index close on Jan 8th-12th, and you can see it.
There is no clear directionality to the markets – not as of now. The increasingly bearish positioning from the retail traders could be pointing to a potential spike up to hunt their stops and/or take out their leveraged positions before any real directionality could set in. Both the bulls and the bears need to be nimble if they want to wade into these markets – a safer option could be to be on the sidelines until the dust settles.
Positional Trading Models: Our positional models are indicating to stay on the sidelines for the day.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops – if any – being active in the overnight session.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Trading Plans for WED. 03/08:
Aggressive Intraday Models: With all the choppiness in the markets due to the ongoing congressional testimony from the Fed chair Powell, it could be wiser to not engage in intraday aggressive trading for today, especially given the static nature of our trading plans. Nevertheless, for those of you who MUST trade (professional trader? addicted trader? whatever may be your reason), models indicate the below trading plans.
For today, our aggressive intraday models indicate going long on a break above 4012, 3995, or 3984 with a 9-point trailing stop, and going short on a break below 4009, 3990, or 3980 with a 9-point trailing stop.
Models indicate explicit short exits on a break above 3969, and long exits on a break below 4025. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:15am ET or later.
By definition the intraday models do not hold any positions overnight – the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform’s bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) – depending on your risk tolerance and trading style – to determine the signals.
NOTES – HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker’s execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance – USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
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