Tug-of-War Along Our Proprietary Key Levels – Week-2, Day-4?
As indicated in our Intraday Alert this morning (click here for details), the market approached two key levels we mentioned in our forecast published last night (click here for details), which mentioned as key levels to base the intraday or medium-term trades off of: 2765 (the Index’s low so far reached 2763.91) and 2775 (the Index’s high so far reached 2774.86) – yes, both reached within one point and then the index retreated – highlighting the repeatedly-demonstrated-by-now predicitve power of our models! (Still, it is worth keeping in mind that quantitative models do NOT consistently produce such uncanny accuracy and hence consider your risk-reward objectives before placing big trades based on these models).
As mentioned in our forecast published last Wednesday night, and reiterated in our alert last Thursday morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short-to-medium term buying. Notwithstanding all the media headlines, our models indicate no serious damage to the bears nor any serious strength to the bulls in today’s session. Hence, the tug-of-war theme still continues.
As mentioned in our forecast published last Wednesday night, and reiterated in our alert last Thursday morning, 2790 is the key level for the S&P 500 Index to clear for traders to engage in short-to-medium term buying. Notwithstanding all the media headlines, our models indicate no serious damage to the bears nor any serious strength to the bulls in today’s session. Hence, the tug-of-war theme still continues.
Model Biases/Outlook:
Both the medium-term and short-term models indicate continued bullish bias, albeit with some caution to confirm break-above/below the key levels (2780-2760-2740) before initating fresh new positions. Notice that the models have now adjusted the previous 2790 level to 2780.
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 14th day in a row.
In spite of the major trade war news headlines, the action this week so far does not indicate much strength to the bears or any serious damage to the bulls. Caution is advised when trading from the short side (sell) while above 2740, as you could get sucked into a bear-trap by false dips around the key levels only to turn around and spike back up.
Trading Plans for Thursday, 06/21/2018:
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 on Wednesday, trading on the long side as the trading plan published Monday night mentioned (click here for details): “the aggressive/intraday models indicate trading from the short side (sell) while the index is below 2755, and from the long side (buy) while above 2765″ – the Index registered the session high of 2763.91 (yes, JUST about 1 point away from the level mentioned) and stayed above 2765 throughout the session, thus triggering long (buy) positions.
For Thursday, the aggressive/intraday models indicate trading from the long side (buy) while the index is above 2775, and from the short side (sell) while below 2760.
For Thursday, the aggressive/intraday models indicate trading from the long side (buy) while the index is above 2775, and from the short side (sell) while below 2760.
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.
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.