Tug of War Along Our Proprietary Key Levels
In spite of the major geopolitical news headlines (North Korea-US Summit, Fed Interest Rates decision, European Central Bank Interest Rates decision), last week has NOT seen much movement in the S&P 500 Index at all – despite what occasional peek at financial media headlines might have you believe. The index opened last week with Monday’s regular session open at 2780.18 and closed the week with Friday’s regular session close at 2779.66 – for a weekly move of 0.52 points!!
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. Last week, the index registered a high of 2791.47 – just shy of one-and-half points from our forecast level and then fell back and stayed below that level throughout the second-half of the week.
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. Last week, the index registered a high of 2791.47 – just shy of one-and-half points from our forecast level and then fell back and stayed below that level throughout the second-half of the week.
Model Biases/Outlook:
Both the medium-term and short-term models indicate continued 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 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 for the 11th day in a row.
Medium-to-long term Models indicate staying bullish above 2760, neutral between 2760 and 2740, and bearish below 2740.
Trading Plans for Monday, 06/18/2018:
Medium-to-long term investors
Meidum-term models indicate bullish bias above 2760, but indicate no new buying below 2790. If already long, hold the positions with a stop loss at 2757.50. 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 ended Friday flat and should be starting the new week with no current positions – since our forecast for Friday clearly mentioned to stay flat between 2790 and 2775 (IF you consider yourself aggressive/intraday trader and have open positions over the weekend, you need to re-assess your trading style and risk appetite).
For Monday, the aggressive/intraday models indicate trading from the short side (sell) while the index is below 2770, and from the long side (buy) while above 2790; stay flat (no positions) between 2770-2790. If trading from the long side, be cautious of false spikes around the 2800 level – if 2800 level is touched and rejected swiftly, put a stop loss on your long at 2785 to protect yourself from a bull trap.
For Monday, the aggressive/intraday models indicate trading from the short side (sell) while the index is below 2770, and from the long side (buy) while above 2790; stay flat (no positions) between 2770-2790. If trading from the long side, be cautious of false spikes around the 2800 level – if 2800 level is touched and rejected swiftly, put a stop loss on your long at 2785 to protect yourself from a bull trap.
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.
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.