Our Short from Friday Working Well and Re-iterated
Our positional models’ short from the trading plans published Friday, 12/17, morning is doing exceedingly well. We titled our trading plans for Monday, 12/06, with “Get Ready for the Tightening Ahead”, and we held off from much trading since then until after the FOMC release this week. Our models continue that theme of risk-off.
We re-iterate this morning what we wrote in our trading plans for Friday, 12/17: “The Fed-induced bubbles in the asset markets are showing signs of deflating swiftly (if not bursting, yet). There are very little – if any – reasons to be holding risk assets with high valuations into the holidays, the prospects of the so-called (and, still being touted by some parties with their own agenda) Santa-rally are not worth exposing yourself to the potential risks”.
If you have been our regular reader, you should remember the cautions we have been publishing in our daily trading plans since at least from Thanksgiving (11/24). Regardless of what anyone might be saying about any individual stocks, the overall markets have been teetering on the brink of turning bearish for many weeks now – you can double check our trading plans or the tradings plans’ RESULTS for the last one month or one year.
Positional Trading Models: As published in our Friday morning’s trading plans here, our Positional Trading Models flipped to Bearish bias on that day (12/17), and went short at 4637. Models are tightening the take profit to a break above 4580. If closed, the models will open a short again on a break below 4576, with a stop loss at 4602.
Intraday/Aggressive Models indicate the trading plans below for today:
Trading Plans for MON 12/20:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4605 or 4562 with a 7-point trailing stop, and going short on a break below 4594, 4580, 4558, or 4548 with a 9-point trailing stop.
Models indicate long exits on a break below 4612, 4598, 4585, or 4570. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:16 am EST or later.
By definition the intraday models do not hold any positions overnight – the models exit any open position at the open of the last bar (3:59pm bar or 4:00pm bar, depending on your platform’s bar timing conv ention).
To avoid getting whipsawed, use at least a 1-minute closing or a higher time frame – 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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