Next Support Level – Confirmed
In our trading plans published on Monday, 12/19, we stated: “…the index is now testing the next key support level around the 3825-3835 range. Our models are indicating a range-bound trading while the index is trading within the broader 3810-3830 range on a daily close basis. If you are short, you might want to take profits on a break out of this range. If you are itching to go long, you might want to wait until the range is broken out of to the upside”.
That support level is confirmed as held by our models, and if you followed the plans you should be long going into the open today. If not, you might want to wait to go long as our models indicate range-bound trading while the index is below 3866. If you are short, you might want to take profits and go flat.
Positional Trading Models: Our positional trading models closed out the short from Thursday, 12/15 (opened at 3893.51) yesterday with a profit of 78.01 index points and are currently flat. Models indicate staying flat until otherwise indicated.
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. 12/21:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 3838, 3848, or 3866 with a 9-point trailing stop, and going short on a break below 3860, 3843, or 3830 with a 10-point trailing stop.
Models indicate long exits on a break below 3863 or 3834, and short exits on a break above 3820. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:40 am 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.
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.
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