The Dancing Bear – How Long Can It Celebrate Before the Bulls Attack?
S&P 500 Index witnessed a dog-fight between the bulls and the bears today, Wed 06/27. The index was up some 23+ points by midday, only to give it all up and close at 2699.63, down 23.43 points! Our Intraday Alert published at 3:02pm EDT said “Intraday models indicate potential testing of the 2705-2695 level, with probably spikes in either direction.” (please click here for the full report). It is to be noted that the index closed, in one hour, exactly in the middle of the range the models predicted as the key range!
Although it appears that the bears have won for now, our models view the action and the region the index is probing as a bit more complicated than that and point to a high risk of sudden spikes in either direction. Bears have to push the index to a daily close below 2690 for an extended push into the bear territory, failing which could lead to an extended period of another tug-of-war around the 2700 region.
Although it appears that the bears have won for now, our models view the action and the region the index is probing as a bit more complicated than that and point to a high risk of sudden spikes in either direction. Bears have to push the index to a daily close below 2690 for an extended push into the bear territory, failing which could lead to an extended period of another tug-of-war around the 2700 region.
Model Biases/Outlook:
Both the medium-term and short-term models’ recent bullish bias was negated last Thursday after noon (click here for our report published on that day), and the bias was slightly bearish to start the week. Monday’s bearish action confirmed the bearish bias and now the models are outright bearish, which is reiterated for the 3rd day in a row.
Trading Plans for Thursday, 06/28/2018:
Medium-to-long term investors
Those who followed our medium-term models should have booked decent profits today on a long position closed out by midday, before the bear attack started. They should be holding no positions as of Wednesday market close. The medium term models are now flat, waiting to open a fresh short (sell) on a break below 2690.
Meidum-term models indicate bearish bias below 2715, but indicate no new short selling while above 2690. The models indicate no long bias until at least a daily close above 2740 (slightly bullish) or above 2755 (outright bullish) with tight stops.
Meidum-term models indicate bearish bias below 2715, but indicate no new short selling while above 2690. The models indicate no long bias until at least a daily close above 2740 (slightly bullish) or above 2755 (outright bullish) with tight stops.
Aggressive, short term, intraday, or professional traders
Those who followed our intraday models should have made decent profit on the long position, closed it out just in time before the bear attack whiplashed the market in the afternoon and avoided getting sucked into the whipsaw action later.
The aggressive, intraday models are currently flat. For Thursday, the aggressive/intraday models indicate indeterminate bias between 2715-2690 – stay flat between these levels.
Above 2715, long bias with very tight stops/trailing stops (5-10 points, depending on your trading style and risk appetite).
Below 2690, short bias, with a trailing stop (or simple stop, depending on your trading style and risk appetite) of 10 points, as the 2705-2695 level could prove to be a pivot for a spike in either direction.
Above 2715, long bias with very tight stops/trailing stops (5-10 points, depending on your trading style and risk appetite).
Below 2690, short bias, with a trailing stop (or simple stop, depending on your trading style and risk appetite) of 10 points, as the 2705-2695 level could prove to be a pivot for a spike in either direction.
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.
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