Earnings to Further Feed or Trip The Bulls on Thursday?
Our S&P 500 Index forecast for Wednesday (07/25/18) – published Tuesday night – stated: “Indications are for continued bullishness in the markets while the index is above 2810. For Wednesday 07/25, if the index closes above 2830, it would indicate accelerating bullishness in the market.” (click here to read/verify this claim). Wednesday, the index closed at 2846.07 – far above the 2830 level mentioned – and has accelerated the bulls re-taking the charge on Tuesday.
Model Biases/Outlook:
After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18 when it closed at 2759.82! Since then, our models have been consistently forecasting bullish strength and are yet to flash any concerns about any bears in sight, and we reiterate that stand for the 20th consecutive day!
For Thursday, 07/26, if the index closes above 2835, it would indicate accelerating bullishness in the market and the index would likely be testing the 2872 high in the near future. If the index closes between 2835 and 2820, it would indicate consolidation of the bullishness. A close below 2810 would negate the current bullish strength, and a close below 2792 is needed for our bias to turn bearish.
Trading Plans for THU 07/26/2018:
Medium-term/long-term Investors
As detailed in the Intraday Alert published Wednesday morning (click here to refer to the full text of the alert), the medium-term models went long (bought) at the index level of 2818, with a 10-point trailing stop. With the Wednesday’s session high registered at 2848.03, the stop trigger was anchored to 2838.03, which was filled in the overnight futures session after the FaceBook earnings’ induced market slide.
The models booked a profit of 20.07 points and are flat (no positions) as of this report publication (11:30pm EDT).
For Thursday’s regular session, medium-term models indicate going long at the open if the open is above 2840 or going long on a break above 2840 if the open is below 2840. A trailing stop of 8-12 points (depending on your individual trading style and risk appetite) is indicated by the models. (click here to read on the conceptual workings of a trailing-stop)
A break below 2810 will trigger the models to go short, with an initial target of 2795 and then the 2785-75 region, and with an initial trailing stop of 8-12 points.
Aggressive, Short-term, Intraday, or Professional Traders
As detailed in the Intraday Alert published Wednesday morning (click here to refer to the full text of the alert), the aggressive, intraday models went long (bought) at the index level of 2818, with a 7-point trailing stop. With the Wednesday’s session high registered at 2848.03, the stop trigger was anchored to 2841.03, which was filled in the overnight futures session after the FaceBook earnings’ induced market slide.
The models booked a profit of 23.07 points and are flat (no positions) as of this report publication (11:30pm EDT).
For Thursday’s regular session, aggressive, intraday models indicate going long at the open if the open is above 2840 or going long on a break above 2840 if the open is below 2840. A trailing stop of 8 points (depending on your individual trading style and risk appetite) is indicated by the models. (click here to read on the conceptual workings of a trailing-stop)
A break below 2830 will trigger the models to go short, with an initial target of 2817, and with a trailing stop of 8 points.
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.
(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.