China, the spin, Continues…

Our medium-term models continued the winning streak on Monday by booking 18.00 S&P 500 index points in profits, and our aggressive intraday models booked 23.00 points in profits, simply by mechanically trading the pre-defined entry and exit points as published in our trading plans before the markets open. This marks four consecutive profitable trading days out of four total trading days in 2019.

Today in the markets, the China theme continues to be in play with speculative spin raising the market outlook for the short term. Despite the warning from Samsung last night, on the heels of the warning from Apple just a couple of days back, markets seem to focus on macro speculation than on economic fundamentals. It is to be seen how long the political spin alone can prop up the market sentiment.

Below, you will find our models’ trading plans for today (for the results of the published trading plans for yesterday, click here):

Trading Plans for TUE, 01/08:

Medium-term/long-term Models


Today’s Plan/Forecast: For today, Tuesday 01/08, our medium-term models indicate trading off of the broad 2575-2535 band – going long on a cross above 2575 with a stop at 2568 and going short on a cross below 2535 with a stop at 2542. In addition, both sides be initiated with a 10-point trailing stop. If these levels are not crossed during the regular session hours, the models would stay flat.

Results from Yesterday: Our medium term models’ trading plans published for yesterday, Monday 01/07, booked +18.00 index points (click here to read the details of the exact trades triggered).

Aggressive, Intraday Models

Today’s Plan/Forecast: For today, Tuesday 01/08, our aggressive intraday models indicate trading off of the 2565-2555 band – going long on a cross above 2565 and going short on a cross below 2555, with a trailing stop of 8-points. In addition, the models indicate a second strategy to trade off of 2542-2535 – going long on a break above 2542 and going short on a break below 2535, both with a 8-point trailing stop.

Results from Yesterday: Our aggressive intraday models’ trading plans published for yesterday, Monday 01/07, booked +23.00 index points (click here to read the details of the exact trades triggered).

Model Biases/Outlook:

As we reiterated on Monday 01/07, our models indicate the broad range of 2558-2485 as the levels the market is going to be trading within. On Monday, the S&P 500 Index tested the upper bound of 2558 intraday but closed below that. For any medium-term directional bias to emerge, the index has to register a daily close outside of that range.

NOTE: Remember that a “trailing stop” works differently from the traditional stop-loss order. Please bear in mind that the trailing stop’s trigger level would keep changing throughout the session (click here to read on the conceptual workings of a trailing-stop).

IMPORTANT RISK DISCLOSURES AND NOTICES – 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.