Bull Consolidation or Bear Emergence? 


Our S&P 500 Index forecast for Friday (07/27/18) – published Thursday night – stated: “…If the index closes between 2840 and 2820, it would indicate consolidation of the bullishness. A close below 2810 would negate the current bullish strength” (click here to read/verify this claim). 

Friday, the index closed at 2818.82 – just about 1.2 points below the lower level, 2820, of the range mentioned for bull consolidation AND more than 8-points above the 2810 level to negate the bullish momentum. Consequently, our models entered an “indeterminate” bias and would wait for Monday’s closing price to form the next directional bias. 

Model Biases/Outlook:


After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18 when it closed at 2759.82! Since then, our models have been consistently forecasting bullish strength and are yet to flash any concerns about any bears in sight, until Friday, 07/27. 

After reiterating the bullish momentum for 21 consecutive days, our models now abandoned the bullish bias with the action on Friday, but have NOT replaced it with bearish bias yet. Consequently, the models are in an “indeterminate” state with NO BIAS in either direction – thus indicating for Monday, 07/30, a “directionless” market until determined otherwise. Models will re-evaluate this after the closing of Mondays’ regular session, based on the market action Monday. 

Trading Plans for FRI 07/27/2018:


Medium-term/long-term Investors


As detailed in the Intraday Alert published Friday (click here to refer to the full text of the alert), the medium-term models were closed out after their trailing stop was hit. The models stayed flat through the rest of the session. 


For Monday, the medium term models indicate an indeterminate bias and are NOT going to enter into any trade. The models will reassess the trading strategies after the close of the market on Monday. 

Aggressive, Short-term, Intraday, or Professional Traders


As detailed in the Intraday Alert published Friday (click here to refer to the full text of the alert), the aggressive, intraday models went short (sold short) at the index level of 2830.00, with an 8-point trailing stop which was anchored at 2832.55 as of the publication of the alert. 


The index later touched a low of 2808.34, thus shifting the stop-trigger to 2816.34, which was later hit and the short position closed for a profit of 13.66 points! The models stayed flat for the rest of the session. 

For Monday’s regular session (as well as Sunday’s overnight session), aggressive, intraday models indicate an “indeterminate” state and indicate not having any actionable trading plan until seeing Monday morning’s market action when they would likely formulate the next trading plan. Till further notice, the models remain “flat” (no positions). 

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) Th
e 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.