It’s China, Again, Today (and, likely again and again)!

Our medium-term models continued the winning streak on Friday by booking 9.70 S&P 500 index points in profits, and our aggressive intraday models booked 11.70 points in profits, simply by following mechanical trading using the pre-defined entry and exit points as published in our trading plan before the markets opened.

Today, the China theme continues to be in play with a positive spin raising the hopes that the US-China trade talks could yield some market positive developments. Another main factor today would be the ISM release which would be examined closely to lay on top of Powell’s dovish signals from Friday.

Below, you will find our models’ trading plans for today, as well as the results of Friday’s published trading plans:

Trading Plans for MON, 01/07:

Medium-term/long-term Models


Today’s Plan/Forecast: For today, Monday 01/07, our medium-term models indicate trading off of the 2540-2520 band – going long on a cross above 2540 and going short on a cross below 2520, both with a 10-point trailing stop (during the regular market session, 9:30am-4:00pm EST). If going long above 2540, a profit target of 2558 is indicated.

Last Published Trading Plan/Forecast: Our last published trading plan stated: “For today, Friday 01/04, our medium-term models indicate trading off of the 2483-2473 band and 2467-2457 band – going long on a cross above 2483 or 2473, and going short on a cross below 2467 or 2457, during the regular market session (9:30am-4:00pm EST). If going long above 2477 or short below 2462, a 10-point trailing stop is indicated” (click here to read the full forecast and/or verify this claim).

Results/Outcome:

Fri 01/04: Booked +9.70 index points in profits on one long

Within the first five minutes into the session, the index broke above 2483, triggering a long position. By 10:05am, it reached an interim high of 2502.70, lifting the trailing stop to 2492.70. In the next fifteen minutes this stop was hit, closing the long with a profit of 9.70 points. The models then stayed flat for the rest of the session.

Past results this month:
Our medium-term models started the month of December with indeterminate state and stayed out of the markets throughout the first half of the month.

Mon 12/17: Booked +20 points in profit on a short
Tue 12/18: Booked +9.25 points in profit on a short

Wed 12/19: Booked +26 points in profit on a short
Thu 12/20: Booked +26.5 points in profit on two shorts
Fri 12/21: No trades
Mon 12/24: No trades

Wed 12/26: Booked +14.75 points in profit on a short
Thu 12/27: Long entered at 2455, carried to Friday
Fri 12/28: Booked +28.75 points in profit on a long
Mon 12/31: Booked +56 points in profits on two shorts and two longs.
Wed 01/02: Booked +13.75 points in profits on three longs and two shorts.
Thu 01/03: Booked +47.53 points in profits on three shorts and two longs

Aggressive, Short-term, Intraday, or Professional Traders

Today’s Plan/Forecast: For today, Monday 01/07, our aggressive intraday models indicate trading off of the 2535-2525 band – going long on a cross above 2535 and going short on a cross below 2530, both with a 7-point trailing stop (during the regular market session, 9:30am-4:00pm EST). If going long above 2535, once above 2542, a profit target of 2558 is indicated.

Last Published Trading Plan/Forecast: Our last aggressive intraday models’ forecast stated: “For today, Friday 01/04, our aggressive intraday models indicate trading off of the 2483-2475 band and 2467-2457 band – going long on a cross above 2483 or 2467, and going short on a cross below 2475 or 2457, during the regular market session (9:30am-4:00pm EST). If going long above 2483 or short below 2457, an 8-point trailing stop is indicated” (click here to read the full forecast and/or verify this claim).

Results/Outcome:
Fri 01/04: Booked +11.70 index points in profits on one long
Within the first five minutes into the session, the index broke above 2483, triggering a long position with an 8-point trailing stop. By 10:05am, it reached an interim high of 2502.70, lifting the trailing stop to 2494.70. In the next ten minutes this stop was hit, closing the long with a profit of 11.70 index points. The models then stayed flat for the rest of the session.
Past results this month: Our aggressive intraday models mostly stayed out of the market in early December.
Mon 12/10: Booked +31.25 points in profit on two shorts
Tue 12/11: Booked +0.50 points in profit on a long
Wed 12/12: No trades

Thu 12/13: Booked -2.25 points in loss on a short
Fri 12/14: Booked +14.25 points in profit on a short

Mon 12/17: Booked +5

1.75 points in profit on a short

Tue 12/18: Booked +15.25 points in profit on three shorts
Wed 12/19: Booked +41.00 points in profit on two shorts
Thu 12/20: Booked +26.5 points in profit on two shorts
Fri 12/21: Booked -2.00 points in loss on two shorts
Mon 12/24: Booked +50 points in profit on two shorts
Wed 12/26: Booked +9.25 points in profit on a long
Thu 12/27: Booked +62.00 points in profit on three short trades and one long trade
Fri 12/28: Booked +10 points on profit one short and two longs
Mon 12/31: Booked +56 points in profits on two shorts and two longs.
Wed 01/02: Booked +14.75 points in profits on two longs and three shorts.

Thu 01/03: Booked +33.50 points in profits on a total of seven trades (five shorts and two longs).

Model Biases/Outlook:

As we reiterated since the midterm elections, “this market is still likely going to be fraught with bull traps rather than bear traps – be cautious when buying into the spikes”.

With the strong move up on Friday 01/04, our models now indicate the broad range of 2558-2485 as the levels the market is going to be trading within. For any medium-term directional bias to form, the index has to register a daily close outside of that range.

NOTE: Remember that a “trailing stop” works differently from the traditional stop-loss order. Please bear in mind that the trailing stop’s trigger level would keep changing throughout the session (click here to read on the conceptual workings of a trailing-stop).

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.