Tug-of-War – Week-2, Day-5…Climactic Friday?
As indicated in our Intraday Alert Thursday morning (click here for details), the market broke through the 2760 level in the first hour of the session, triggering a Short position by our intraday models, according to the trading plan given in our forecast published Wednesday night (click here for details).
Yes, again profitable hits for days in a row, with no recorded losing trade for days – highlighting the repeatedly-demonstrated-by-now predicitve power of our models! (Still, it is worth keeping in mind that quantitative models do NOT consistently produce such uncanny accuracy and hence consider your risk-reward objectives before placing big trades based on these models).
As mentioned in our forecast published last Wednesday night, and reiterated in our alert last Thursday morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short-to-medium term buying. The bulls seem weakened with the action so far this week, but still the bearish territory is not in sight yet. The index is approaching key level of 2740, which could bring in climactic reactions in either direction. Hence, the tug-of-war theme still continues.
Yes, again profitable hits for days in a row, with no recorded losing trade for days – highlighting the repeatedly-demonstrated-by-now predicitve power of our models! (Still, it is worth keeping in mind that quantitative models do NOT consistently produce such uncanny accuracy and hence consider your risk-reward objectives before placing big trades based on these models).
As mentioned in our forecast published last Wednesday night, and reiterated in our alert last Thursday morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short-to-medium term buying. The bulls seem weakened with the action so far this week, but still the bearish territory is not in sight yet. The index is approaching key level of 2740, which could bring in climactic reactions in either direction. Hence, the tug-of-war theme still continues.
Model Biases/Outlook:
Both the medium-term and short-term models’ recent bullish bias is negated today, and the bias is now currently slightly bearish albeit with some caution to confirm break-above/below the key levels (2785-2760-2740) before initating fresh new positions.
As per the medium-term forecast published June 7th, 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 and holds true for the 15th day in a row. Chances are that this level would be tested Friday, but do NOT initiate a short sale on Friday unless the index breaks below 2735. Since we are still not in bearish territory, caution should be exercised when initiating short positions especially when going to carry them over the weekend.
Trading Plans for Friday, 06/22/2018:
Medium-to-long term investors
(updated to correct the day/date above to Friday, 06/22/2018 – @ 10:35am)
Meidum-term models indicate bullish bias above 2775, but indicate new buying only above 2782. The models indicate no short bias until at least a daily close below 2740 (slightly bearish) or below 2735 (outright bearish) with tight stops. Models indicate neutral bias within 2775-40.
Meidum-term models indicate bullish bias above 2775, but indicate new buying only above 2782. The models indicate no short bias until at least a daily close below 2740 (slightly bearish) or below 2735 (outright bearish) with tight stops. Models indicate neutral bias within 2775-40.
Aggressive, short term, intraday, or professional traders
Those who followed our intraday models should have done very well on Thursday! The models entered into a short position in the first hour of the session, then instituted a trailing stop of 5 points, which was hit at 2754, for a profit of about 6 points. Within the next two hours, the index went up to 2760 level and failed and broke below it again, triggering another short sell – the models are currently holding onto this short position.
For Friday, the aggressive/intraday models indicate letting the currently open short ride or let hit by the trailing stop of 6 points (currently anchored at 2756). If that is hit, no long bias is indicated until above 2765. Stay flat until another opportunity to go short on a break below 2760. Do not initiate aggressive new positions outside of the key trading levels as you do not want to hold open positions into the weekend on an intraday model’s biases.
For Friday, the aggressive/intraday models indicate letting the currently open short ride or let hit by the trailing stop of 6 points (currently anchored at 2756). If that is hit, no long bias is indicated until above 2765. Stay flat until another opportunity to go short on a break below 2760. Do not initiate aggressive new positions outside of the key trading levels as you do not want to hold open positions into the weekend on an intraday model’s biases.
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.
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.