Bulls, Bears, and Pigs
Anybody who’s been around the block for a while would have heard the saying on the street: “Bulls make money, bears make money, but pigs get slaughtered”. Over the last few weeks, if you have been a bull, you probably made money; if you are a bear, you probably made money; if you are a pig and hoping to pig out on your recent gains, you might want to heed the caution of the words above!
Our models this morning are flashing signs of potential downward correction in the coming days. How deep or how long that might last is not clear yet, but there does not appear to be much scope for any long-side gains going forward for a while. If you have been playing on the long side, it might be prudent to take some money off the table. Bears might want to start nibbling a bit again. Continuing on the theme of our last published trading plan on Thu. 08/04, there is no real directionality setting up yet, and the markets might take some more time just meandering around – so, both the bulls and bears need to nimble if engaging in trading these days.
Positional Trading Models: Our positional trading models indicate going short on a break below 4140 with a 27-point trailing stop, on a break below 4120 with a 35-point trailing stop. If opened a short, the trailing stop will be adjusted in the coming sessions.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Trading Plans for TUE 08/09:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4153, 4138, or 4122 with a 9-point trailing stop, and going short on a break below 4150, 4143, 4131, 4119, or 4097 with a 9-point trailing stop.
Models indicate long exits on a break below 4168 or 4160 , and short exits on a break above 4112 or 4085. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:46 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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