Continuation of Back To Basics?
With all the major known geopolitical risks and events out of the way, including Thursday morning’s ECB interest rate decision, it is likely that investors would begin to focus on the BASICS – Profit, Loss, and Risk. Friday morning, there is one important economic release – University of Michigan Consumer Sentiment Index – which might further sway the investors to focus away from the recent geopolitical fixation onto the basics of the market factors such as economy, profit, loss, and risk.
As mentioned in our forecast published last night, and reiterated in our alert this morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short term, intraday buying. On Thursday, the index registered a high of 2789.06 – just shy of one point from our forecast level and then fell back and stayed below that level throughout the session.
As we hypothesized on Wednesday night, the sessions on Thursday and Friday could be leading up to some inflection point revealing clues about the market direction for the next few weeks.
As mentioned in our forecast published last night, and reiterated in our alert this morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short term, intraday buying. On Thursday, the index registered a high of 2789.06 – just shy of one point from our forecast level and then fell back and stayed below that level throughout the session.
As we hypothesized on Wednesday night, the sessions on Thursday and Friday could be leading up to some inflection point revealing clues about the market direction for the next few weeks.
Model Biases/Outlook:
Both the medium-term and short-term models indicate strong bullish bias, albeit with some caution to confirm the key levels (2790-2760-2740) before initating fresh new buying. As per the medium-term forecast published Wednesday night, “medium-term models now indicate switching to a slight bearish bias if the index falls below 2740 on a daily close basis.”. We reiterate that level for the 7th day in a row.
Medium-to-long term Models indicate staying bullish above 2760, flat between 2760 and 2740, and bearish below 2740.
Trading Plans for Friday, 06/15/2018:
Medium-to-long term investors
Meidum term models indicate bullish bias above 2760, but indicate no new buying below 2790. The models indicate no short bias until at least a daily close below 2740 (slightly bearish) or below 2735 (outright bearish). Models indicate staying flat (no positions) between 2760-35.
Aggressive, short term, intraday, or professional traders
Those who followed our intraday models would have stayed flat throughout Thursday. For Thursday, the models indicated trading from the long side while above 2790 and from the short side while below 2770 and staying flat between that range. The market stayed exactly within this range (day’s low 2776.52 and high 2789.06) and hence triggered no intraday trades throughout the regular session.
For Friday, the aggressive/intraday models indicate trading from the long side (buy) while above 2790 and from the short side (sell short) while below 2775 and flat between these levels. Use tight stops considering the weekend risk.
For Friday, the aggressive/intraday models indicate trading from the long side (buy) while above 2790 and from the short side (sell short) while below 2775 and flat between these levels. Use tight stops considering the weekend risk.
IMPORTANT NOTICES & DISCLAIMERS – 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 pa
st 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.
st 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.