Tug-of-War – Advantage the Lurking Bear?
As indicated in our Models’ Weekend Positioning report published last Friday around 3:30pm (click here for details), our short term/intraday/aggressive models ended the week with a short (sell) position with a stop-loss at 2766. As forecast in that report: “Models are flashing a little weaker bulls and speculate another leg below 2760 into the Monday session”. The index has to clear 2775 for the current pressure from the bears to subside.
The bulls seem weakened with the action last week, but still the bearish territory is not in sight yet. The index is approaching the key level of 2740, which could bring in climactic reactions in either direction.
The bulls seem weakened with the action last week, but still the bearish territory is not in sight yet. The index is approaching the key level of 2740, which could bring in climactic reactions in either direction.
Model Biases/Outlook:
Both the medium-term and short-term models’ recent bullish bias was negated last Thursday after noon (click here for our report published on that day), and the bias is now currently slightly bearish. Traders to monitor the action around the key levels (2775-2760-2740) 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 17th day in a row. Chances are that this level would be tested the coming week (06/25-06/29), but do NOT initiate a short sale on an intraday basis unless the index breaks below 2735. Since we are still not in bearish territory, caution should be exercised when initiating short positions especially around the 2740-35 level.
Trading Plans for Monday, 06/25/2018:
Medium-to-long term investors
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 throughout last week and on last Friday ! The models entered into a short position at 2759.5 on Friday and carried it over the weekend, with a stop at 2766.
For Monday, the aggressive/intraday models indicate letting the currently open short ride or let hit by the trailing stop of 6 points (currently anchored at 2766 on the index level for the regular session, and at 2754 on the e-mini futures, ES, due to the slide in the index in the overnight futures markets as of now, 10:05pm EDT on Sunday, 06/24). If that is hit, no long bias is indicated until above 2772. Stay flat between 2772 and 2761. If flat, go short below 2758.
For Monday, the aggressive/intraday models indicate letting the currently open short ride or let hit by the trailing stop of 6 points (currently anchored at 2766 on the index level for the regular session, and at 2754 on the e-mini futures, ES, due to the slide in the index in the overnight futures markets as of now, 10:05pm EDT on Sunday, 06/24). If that is hit, no long bias is indicated until above 2772. Stay flat between 2772 and 2761. If flat, go short below 2758.
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.
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t 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.
t 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.
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