Earnings Season to Exhilarate or Exasperate?

Within a week after publishing our trading plans on Fri, 04/08, S&P 500 has breached the indicated support levels of 4500 and 4460, and has confirmed our directional bias to the downward. The earnings season kicking off today may be the last hope the markets have to stop the bleeding, but the early indications do not necessarily bode well. We might get a better view into the earnings’ shape by early next week. Until changed otherwise, our models continue to sport a bearish bias.

Positional Trading Models: As per our last Friday’s positional trading plans, our models  went short on the daily close below 4495 (at 4488.67), with a hard stop at 4545. On Monday, we tightened the take-profit on this short to 4448, after 10:55am. The short survived that into today’s session. We are tightening the take-profit further to 4433, effective after 10:10am ET today, guaranteeing 55.67 points of profit if hit. If the take-profit gets hit, the models will stay flat for the rest of the session.

Intraday/Aggressive Models indicate the trading plans below for today:

Trading Plans for WED 04/13:

Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4433, 4421, 4406, or 4391 with a 9-point trailing stop, and going short on a break below 4427, 4418, 4400, or 4386 with a 9-point trailing stop. 

Models indicate long exits on a break below 4410 or 4430. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:10am 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.

(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please click here to see for yourself how our pre-published model trades have performed so far! Seeing is believing!) 

 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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