Market Volatility to Continue Into the New Year
Trading Plans for MON, 12/31:
Medium-term/long-term Models
Today’s Plan/Forecast: For today, Monday 12/31, our medium-term models indicate going long on a break above 2508 or 2493 or 2483, and going short on a break below 2502, 2498, or 2488 (which ever might occur during the regular session 9:30am-4:00pm). If going long above 2508 or short below 2488, the trailing stop shall be set at 10-points.
Last Published Trading Plan/Forecast: Our last medium-term forecast stated: “For today, Friday 12/28, our medium-term models indicate adjuting yesterday’s open long position’s trailing stop to 15-points at today’s open. If the stop is hit, the models would stay flat for the rest of the day” (click here to read the full forecast and/or verify this claim).
Results/Outcome:
Fri 12/28: Booked +28.75 points in profit on a long
The index opened Friday at 2498.77, thus the stop loss on the open long was set to 2483.77. This was hit around 10:32am, closing the long (opened on Thursday at 2455) for a profit of 28.75 points.
Past results this month:
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
Mon 12/24: No trades
Wed 12/26: Booked +14.75 points in profit on a short
Thu 12/27: Long entered at 2455, carried to Friday
Aggressive, Short-term, Intraday, or Professional Traders
Today’s Plan/Forecast: (today’s aggressive intraday models’ trading plan is identical to that of the medium-term models) For today, Monday 12/31, our medium-term models indicate going long on a break above 2508 or 2493 or 2483, and going short on a break below 2502, 2498, or 2488 (which ever might occur during the regular session 9:30am-4:00pm). If going long above 2508 or short below 2488, the trailing stop shall be set at 10-points.
Last Published Trading Plan/Forecast: Our last aggressive intraday models’ forecast stated: “For today, Friday 12/28, our aggressive, intraday models indicate going short on a break below 2480 with an 8-point trailing stop, and going long on a break above 2490 with a 10-point trailing stop. The models also point to an alternative trade of going long on a break above 2510 with a 10-point trailing stop” (click here to read the full forecast and/or verify this claim).
Friday, 12/28 with a net profit of 10 points on one short and two longs
The index broke below the 2480 level around 10:30am, triggering a short with 8-point trailing stop. Within the next five minutes, the index reached an interim low of 2474.31, taking the trailing stop to 2482.50 (using the nearest 0.25). This stop was hit in the following five minutes, closing the short with a loss of 2.50 points.
The index broke above the 2490 level around 10:50am, triggering a long position with 10-points trailing stop. Within the next five minutes, an interim high of 2491.17 was reached, taking the trailing stop to 2481.25 which was hit in the following five minutes, closing the long with a loss of 8.75 points.
The 2490 level was broken above a second time around 11:30am, triggering another long position. This long survived all the way to the session high of 2520.27 registered around 3:00pm, taking the trailing stop to 2520.25. This stop was hit in the following ten minutes, closing the long with a profit of 20.25 points.
Thus, the aggressive intraday models closed Friday, 12/28 with a net profit of 10 points (-2.50 -8.75 +20.25).
Past results this month: Our aggressive intraday models mostly stayed out of the market in early December.
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
Mon 12/24: Booked +50 points in profit on two shorts
Wed 12/26: Booked +9.25 points in profit on a long
Thu 12/27: Booked +62.00 points in profit on three short trades and one long trade
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”.
With the historic and wild move up on Wednesday 12/26, our models now indicate the range of 2535-2485 as the broad levels the market is going to be trading within. For any medium-term directional bias to form, the index has to break out of that range.
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.
