Friday’s Close Points to the Grinch!
Life is – should be – bigger than what happens in the financial markets or how much money is made or lost (so is leading a nation – wish someone told that to our president). Wishing everyone Happy Holidays!
Trading Plans for MON, 12/24:
Medium-term/long-term Models
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
Fri 12/21: No trades
Today’s Plan/Forecast: For today, Monday 12/24, our medium-term models indicate staying out of the markets.
Last Published Trading Plan/Forecast: Our last medium-term forecast indicated no trading by our medium term models (click here to read the full forecast and/or verify this claim).
Results/Outcome: No trades.
Aggressive, Short-term, Intraday, or Professional Traders
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
Fri 12/14: Booked +14.25 points in profit on a short
Mon 12/17: Booked +51.75 points in profit on a short
Thu 12/20: Booked +26.5 points in profit on two shorts
Today’s Plan/Forecast: For today, Monday 12/24, our aggressive, intraday models indicate going long on a break above 2425 with a 8-point trailing stop, and going short on a break below 2390 with a 10-point trailing stop. For the trades to trigger, the breaks should occur during the regular session hours (9:30am-4:00pm EST).
Last Published Trading Plan/Forecast: Our last aggressive intraday models’ forecast stated: “For today, Friday 12/21, our aggressive, intraday models indicate going long on a break above 2593 with a 7-point trailing stop, and going short on a break below 2464 with a 10-point trailing stop” (click here to read the full forecast and/or verify this claim).
Thus, our aggressive intraday models booked a net loss of 2 points on Thursday’s trading plans (-10 + 8).
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”.
The index has tracked our bearish forecasts and has come down to test the key support level of 2610-2620 and even the 2585 level before taking a breather on 12/10, Monday. The market slide resumed on Monday 12/17 with the index closing below 2550. Our models are biased to the bearish side and will remain so while the index is below 2535.
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 continued to stay bearish while the index is below 2710. While within the 2710-2770 band, we reiterated an “indeterminate” bias.
As of Wed 11/14, we adopted a “mildly bearish” bias while below 2755. With the close below 2685 on Tue 11/20, we updated this to an outright “bearish” bias for Wed 11/21.
With the close of Wed 11/28, our models negated this bearish bias and adopted an “indeterminate” bias for Thu 11/29. With the close below the key 2535 level (prior level was at 2610), models are now bearish since Monday, 12/17.
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:
(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.