The Fed Meeting Minutes and China

With Fed Meeting minutes scheduled to be released at 2pm EST, the markets have two main levers today that may be pulled either way, depending on the dominant side (bullish/bearish). Beyond the spin, market strategists would be closely watching the Fed minutes for re-inforcing/re-interpreting the tone of Powell’s speech from last week.

Our models indicate a bullish bias while the index is above 2555. Unless the bias is negated, the near term target for this bullish bias is the 2630-2635 band.

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 WED, 01/09:

Medium-term/long-term Models


Today’s Plan/Forecast: For today, Wednesday 01/09, our medium-term models indicate trading off of the broad 2590-2547 band – going long on a cross above 2590 and going short on a cross below 2547 – with a 10-point trailing stop on both trades. If these levels are not crossed during the regular session hours, the models would stay flat.

If a long is triggered, the profit target would be 2630, and if a short is triggered the profit target would be 2530.

Results from Yesterday: Our medium term models’ trading plans published for yesterday, booked -0.56 index points in losses (for the results of the published trading plans for yesterday, click here):

Aggressive, Intraday Models

Today’s Plan/Forecast: For today, Wednesday 01/09, our aggressive intraday models indicate going long on a break above 2578 or 2588 or 2560, and going short on a break below 2570 or 2555 during regular session hours (9:30am-4:00pm), with an 8-point trailing stop.

Results from Yesterday: Our aggressive intraday models’ trading plans published for yesterday, booked +3.54 index points in profits (for the results of the published trading plans for yesterday, click here):

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.