Market Reaching an Imminent Inflection Point – Day 3
Our S&P 500 Index forecast for today (Thursday) – published on Wednesday night – stated: “The index has to close below 2804 to cause any slowdown of the bulls!”. Staying true to the story of the last many days, the index did indeed track this – just under one point AGAIN – and closed at 2804.49!! (click here to read this report/verify this claim)
THAT’s A HATTRICK!! OUR MODELS HAVE BEEN CALLING THE CLOSE THAT HAS BEEN COMING TRUE JUST UNDER ONE POINT MARGIN…FOR THREE DAYS IN A ROW!! Anyone can publicly verify it from the forecasts published the night before the market opened…see the links given below!
The Current Hattrick – Documented:
Tuesday night, we publsihed the forecast for Wednesday, which stated: “Indications are for a range-bound, choppy trade while the index is within the key range of 2815-2790. A daily close outside of this range is needed for the next directional bias to manifest in the market.” (click here to read this report/verify this claim):
– The market on Wednesday closed at 2815.62, just 0.62 above the upper range we indicated. The 0.62 point breach and the associated action around it was deemed not a credible daily close above our range, and we raised the caution that it could be a “bull trap” instead for Thursday!
– The index on Thursday (today), indeed was down right from the open and closed lower at 2804.49, just about in the middle of that range!
Monday night, we published this forecast for Tuesday: “For Tuesday, 07/17, the models point to a continuation of the bull consolidation, within the broad 2775-2810 band.” (click here to read this report/verify this claim) – and, the market today closed at 2809.55, just about 0.5 below (0.45 to be exact) the 2810 level our models indicated!
(no, we do NOT believe that there is some market beast reading our forecasts and hitting the levels according to it just to humor us or our readers – but, we still feel flattered with our regular readers’ commenting that way. Thank you!)
Model Biases/Outlook:
After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18! Since then, our models have been consistently forecasting bullish strength and are yet to flash any concerns about any bears in sight, and we reiterate that stand for the 13th consecutive day!
Indications are for a range-bound, choppy trade while the index is within the key range of 2815-2790. If the index probes 2820 on Friday and if it closes above 2815 (it failed to do this on Thursday, after closing at 2815.62 on Wednesday), it would confirm the bullish breakout of today (Wednesday), which would open a rather smooth jaunt towards the 2870 region in the near future.
Tomorrow being a Friday – end of the trading week – we anticipate a dog-fight between the bulls and the bears to push the index out of this tight range. Who wins the fight tomorrow (or if no one does) would reveal some clues for the next direcitonal bias. As of now, the market is whipsawing within a directionless channel.
Our models indicate that, tomorrow (Friday, 07/20), the index has to close below 2804 or above 2810 for any directional bias to develop; if not, then the tug-of-war would likely continue into the next week!
Trading Plans for FRI 07/20/2018:
Medium-term/long-term Investors
As per the Intraday Alert published on Thursday morning (click here to read the alert), the medium-term models are flat after the trailing stop was hit. The models did not enter any new positions since then.
(click here to read on the conceptual workings of a trailing-stop)
For Friday, based on the overnight futures’ market action so far, the models are raising caution to the bulls while the index is below 2804. With no significant economic releases due on Friday, the market will be mostly driven by the technicals of the price action.
Medium-term m
odels indicate a bullish bias while the index is above 2804. No short trade indicated until all the way below 2790. If 2790 is breached, models indicate going short with an initial target of 2775 and then the 2750-2745 region, and a stop-loss of 8-12 points (depending on your individual trading style and risk appetite). Stay flat between 2805 and 2790.
Aggressive, Short-term, Intraday, or Professional Traders
As per the Intraday Alert published on Thursday morning (click here to read the alert), the intraday, aggressive short-term models are flat after the trailing stop was hit on the last short position taken. The models did not enter any new positions since then.
(click here to read on the conceptual workings of a trailing-stop)
For Friday, based on the overnight futures’ market action so far, the models are raising caution to the bulls while the index is below 2804. With no significant economic releases due on Friday, the market will be mostly driven by the technicals of the price action.
Aggressive short-term models indicate bullish bias while above 2810. No short trade indicated until all the way below 2803. If 2803 is breached, models indicate going short with an initial target of 2794 and a stop-loss of 6-9 points (depending on your individual trading style and risk appetite). Stay flat between 2810 and 2803.
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 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.