Publicly Bullying a Nation’s Pride Makes Not For a Deal-making Strategy!

With no major economic or earnings releases on the horizon, markets to obsess over the deteriorating US-China trade dispute situation. Falling yields are beginning to spook the investors. Public bullying of a sovereign nation’s pride seems to have brought us here (we need “diplomats” running the foreign affairs).  

Trump is likely to change his course and tone/stand on a whim if/when he begins to appreciate the potential damage to the US stock markets (even if not for the economy in the short run) a protracted US-China trade war can bring – those who can rightly gauge that “if”/”when” (or, “in the know”) can make some significant returns on their market bets. Those who do not have such “access” should be very cautious about making trades based on market headlines.

Our models are still “cautiously bearish” for today. Read below for our models’ trading plans for today:

Trading Plans for WED, 05/29:

NOTE: The index by itself is NOT tradable. The model plans here based on the S&P index level can be used to trade any instrument that tracks the index – the futures on the index (ES, ES-mini), the options on the futures (ES options), the SPX options, the ETF SPY are just a few examples of the instruments one can adapt these plans to. 

These plans are NOT an investment advice to buy or sell any specific securities but are intended to aid – as informational, educational, and research tools – in arriving at your own investment/trading decisions. Always consult a Financial Advisor before making your investment/trading decisions if you are not knowledgeable about these markets.  

Medium-Frequency Models: For today, Wednesday 05/29, our medium-frequency models are carrying an open short from yesterday – opened at 2825, with a 10-point trailing stop anchored at 2811.58 as of yesterday’s regular session close. 

Models indicate adjusting the trigger to 2795 and making the trailing stop a 6-point trail until the position is closed. Additionally, the short is indicated to be exited on a break above 2788. 

Once flat, models indicate going short on a break below 2800 or 2790, with an 8-point trailing stop, and going long on a break above 2825 with an 10-point trailing stop.  

Note: For the trades to trigger, the breaks should occur during the regular session hours starting at 9:30am ET. By design, these models do NOT open any new positions after 3:45pm. Only one open position at any given time.

Aggressive Intraday Models: For today, Wednesday 05/29, our aggressive intraday models indicate using 2785 as a pivot for both long and short trades; they would go long on a break above 2785 and go short on a break below 2785 – both sides with an 8-point trailing stop. Also, models indicate additional pivots at 2790 and 2780 for both long and short entries, with 8-point trailing stops. 

Note: For the trades to trigger, the breaks should occur during regular session hours starting at 9:30am ET. Due to the intraday nature of these aggressive models, they indicate closing any open trades at 3:55pm and remaining flat into the session close. No opening of new positions after 3:45pm. Only one open position at any given time.
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.