Wild Gyrations Ahead!


Last week’s wild moves in the market point to the onset of potential regime change in the markets from the long bullish regime to a bearish one! Our models advise caution against getting into the markets on false spikes up. One needs to confirm the moves against key levels to enter into more probabilistic trades. 

In the mean time, our models continue to churn out winning trade after winning trade in this volatile, choppy markets, with forecasts and trading levels given publicly before the market opens each trading day! 

See below for the key levels our models are monitoring for further action.  

Model Biases/Outlook:


The bearish pressure will continue as long as the index is below the 2710 level and there is no bullish territory in sight until all the way above 2755.

A Brief Trace Back of The Current Bias/Outlook


Thursday, 09/27, our models had negated the previously adopted bullish bias and signaled a neutral bias between 2933 and 2887, which was later updated to 2920 and 2880. 

On a break below 2880 on 10/10/18, our models executed the pre-published trading plan to book 142 points in profit on a short position! Our models have since adopted a “cautiously bearish” bias. This caution is in view of potential spikes up in a whipsaw mode.

As of the close on Wed, 10/24, our models turned bearish and continue to stay bearish while the index is below 2710.    

Trading Plans for MON, 10/29:


Medium-term/long-term Investors


Following big wins during the volatile deep moves this month, the medium-term models are currently flat and sporting a bearish bias. 

Friday’s trading plan stated: “For today, Friday 10/26, our medium-term models indicate going short on a break below 2645 during the regular session – with a 10-point trailing stop. No long trade indicated for today.” (click here to read the full report and/or to verify this claim). This plan led to a short position which was later closed by the trailing stop for a profit of 6.5 points. The models remained flat for the rest of the session. 

For today, Monday10/29, our medium-term models indicate going short on a break below 2650 during the regular session – with a 10-point trailing stop. No long trade indicated for today until all the way above 2755. 

Aggressive, Short-term, Intraday, or Professional Traders


As our regular readers have experienced, our aggressive intraday models have performed exceptionally well during the volatility last two weeks, booking more than 200+ points in profits! After closing yet another profitable short trade last Friday, our models are starting the new trading week this morning flat – with no positions. 

For today, Monday 10/29, our aggressive intraday models indicate going short on a break below 2660 during regular session hours with a 8-point trailing stop. If the short is opened and the trailing stop closes it, then the models would stay flat for the rest of the session. Models indicate going long on a break above 2680 during regular session, with a 6-point trailing stop. 


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.