And Then the (Fed) Doves Became Hawks!
Fed’s Brainard and Daly – two well known doves – are spooking the markets by turning into hawks with their public comments yesterday. Markets are reacting as if the Fed’s resolve to fight inflation is some flash news. Neither may be surprising for keen Fed/bond market observers.
As our trading plans published on 03/29, Tuesday – and reiterated on 04/01, Friday – the near term directional move seems to be unfolding, and it is confirming that the last couple of weeks of rise was just a bull trap!
Positional Trading Models: Our positional trading models indicated going short on a daily close below 4585, with a hard stop on a daily close above 4625, (to remain in effect until changed otherwise). This triggered a short in our positional trading last Thursday, 03/31, with the models going short on the close at 4530.51, with the stop tightened to a daily close above 4585. This morning, we are tightening this hard stop to 4478, guaranteeing a gain of 51+ points if hit.
Intraday/Aggressive Models indicate the trading plans below for today:
Trading Plans for WED 04/06:
Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4458, 4486 or 4502 with an 8-point trailing stop, and going short on a break below 4497, 4490, 4482, 4465, or 4452 with a 9-point trailing stop.
Models indicate long exits on a break below 4506, and short exits on a break above 4455. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:01am ET 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 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.
#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #coronavirus, #bear, #recordhigh, #bidenrally, #vaccinerally, #yields, #fomc, #fed, #newhigh, #stocks, #futures, #inflation, #powell, #thanksgiving, #omicron, #interestrates, #rates, #inflation, #russia, #ukraine, #fomc