Bulls Getting Bolder? Bears to Re-charge?  


The S&P 500 Index Outlook for Tuesday – published Monday night – stated: “For Tuesday, the models continue to indicate the risk tilted towards a move up to test the 2735-45 region before further directional bias could pull the index in either direction”. (click here for the full report)

On Tuesday as well as on the shortened-overnight-futures market on Wednesday, the index indeed entered this range for the session highs before retreating. 

Model Biases/Outlook:


As we published 13 days back, 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). Last week’s market action confirmed the bearish bias and now the models are outright bearish, which is reiterated for the 9th day in a row.

For Thursday, the models continue to indicate the risk tilted towards a move up to test the 2735-45 region before further directional bias could pull the index in either direction. On the downside, 2705-2695 continues to act as a strong support band.

Trading Plans for THU, 07/05/2018:


Medium-term/long-term Investors


The medium term models are now flat, waiting to open a fresh short (sell) on a break below 2695 or go long (buy) on a break above 2752 (admittedly a rather broad range, but that is where the potential inflection points are currently indicated). 


Meidum-term models indicate bearish bias below 2715, but indicate no new short selling while above 2695. The models indicate no long bias until at least a daily close above 2740 (slightly bullish) or above 2752 (outright bullish) with tight stops.

Aggressive, Short-term, Intraday, or Professional Traders


For Thursday, the aggressive/intraday models indicate indeterminate bias between 2727-2714 – stay flat between these levels. Above 2727, long bias with tight stops/trailing stops. Below 2714, short bias with a trailing stop of 8 points. 


If short and if the index falls below 2690, increase the trailing stop to 12 points and let the position ride or the stop get hit for a profit. If long and if the index rises above 2755, put a trailing stop for 12 points and let the position ride or the stop get hit for a profit. 

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.

(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.

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