Can the Bears Mount an Attack on The Rather Tired Bull?
On Friday 07/06/18, the S&P 500 Index broke out of the 2735-45 range that we referred to in the forecasts all that week long, and triggered long (bought) positions by both our Medium-term and Intraday/Aggressive models, as alerted to in our Intraday Alert published on Friday afternoon (click here for the full report). This action confirmed the strengh of the bulls in the current market and the weakened bear, and continued for the full week by breaking many key resistance levels higher!
On Wed 07/11, the day when the media was talking of escalating trade war and the market appeared to be heading downwards, our models indicated an underlying bullish move forming, and we wrote: “In spite of multiple alarms about geopolitical concerns and increasingly aggressive trade war rhetoric, the bull spirit did not get dented much…This speaks to the strength of the current bullish momentum”. (click here to read/double check from the full report)
On Mon 07/16, the index has just spent time in a consolidation mode. The bullish trend is undamaged while the index is above 2772. It is indicated to accelerate if/when the index crosses above 2805, and then 2815. Only a daily close below 2772 will confirm the negation of the current bull run.
Model Biases/Outlook:
After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18! 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 10th consecutive day!
For Tuesday, 07/17, the models point to a continuation of the bull consolidation, within the broad 2775-2810 band. Indications are for a tug-of-war between the bulls and the bears while the index is within this range.
On the upside, 2805-2815 band would be a hard battle for the bulls to clear. If the index manages to break above 2815, then the bullish move would jaunt towards the 2870 region in the near future; if broken below 2775, indications are for consolidation towards the 2750-2740 region. Between this broader 2775-2815 band, it would be a choppy, whipsaw range-trading.
Trading Plans for TUE 07/17/2018:
Medium-term/long-term Investors
As per the Intraday Alert published on Monday morning (click here to read the alert), the medium-term models have exited their profitable long positions and ended the day flat (no positions).
For Tuesday, medium-term models indicate bullish bias while above 2810. No short trade indicated until all the way below 2775. If long and the index touches 2814, place a 10-point trailing stop and let the position run or let the stop hit. If 2775 is breached, models indicate going short with a target of the 2750-2745 region, and a stop-loss of 8-12 points.
Aggressive, Short-term, Intraday, or Professional Traders
As per the Intraday Alert published on Monday morning (click here to read the alert), the intraday, aggressive, short-term models have exited their profitable long positions and ended the day flat (no positions).
For Tuesday, intraday, aggressive, short-term models indicate bullish bias while above the 2785-2795 band. If long and the index touches 2805, place a 10-point trailing stop and let the position run or let the stop hit. No short trade indicated until below 2780, with very tight stops (5 to 8 points). If short and 2775 is broken below, place a 8-point trailing stop and let the position run or let the stop hit.
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.