Day 4: The Chop-chop Train Chugging Along the Bulls To The January High and Beyond? This Week to Reveal!
As per our Intraday Update yesterday, Tuesday 08/07, our medium-term models are sitting on a long position entered at 2862.25, with a 10-point trailing stop with the stop trigger anchored at 2853.43; our intraday aggressive models are sitting on one long position entered yesterday at 2856.25 with a 6-point trailing stop, and another long position entered on Monday at 2846.25 with a 6-point trailing stop – both these trialing stops have the trigger anchored at 2857.43. (click here to read the full report/verify this claim).
The index, on Tuesday, closed at 2858.45 – comfortably out of the choppy trading range of 2850-2820. The likely target to take out next is the January high of 2872.87, with not much of meaningful resistance in the way. The only thing that can thwart this journey to another all-time high is potential geopolitical news that could prove highly negative for the markets. Barring any such developments, the next stop for this move appears to be 2873+ in a week or two.
Model Biases/Outlook:
The action of the market on Tuesday indicates consolidation of the bullish action, potentially in preparation for another assault at the January’s record high. There is high probability that the index tests the record high this week, barring any geopolitical developments hurting the bulls.
Our models are now clearly sporting a bullish bias. If the index closes above 2852 this week, then the index is indicated to move to take out the January high of 2872.87. New highs could very well occur within this week as well, barring any negative geopolitical developments. There is no bears in sight, all the way to below 2815.
A Brief Trace Back of The Current Bias/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, until Friday, 07/27.
After reiterating the bullish momentum for 21 consecutive days, our models now abandoned the bullish bias with the action on last Friday 07/27, but have NOT replaced it with bearish bias yet. We are in this “neither bullish, nor bearish” state since then, and repeat it for today, Monday, 08/06.
Eight days after the “neutral/indeterminate” bias entered into on Friday 07/27, our models have resumed the bullish bias yesterday, Tue 08/07. We continue this bullish bias for the second day today, Wed 08/08.
Trading Plans for WED, 08/08:
Medium-term/long-term Investors
Medium term models indicate a bullish state for the S&P 500 Index. The models are currently long – bought at 2862.25 – with the 10-point trailing stop’s trigger set at 2853.43; 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) .
For Wednesday’s regular session, the medium term models indicate holding the long unless it trips the stop trigger and gets sold. If the stop triggers, then the models would indicate going long ONLY above 2865. No bearish bias until all the way below 2820.
Aggressive, Short-term, Intraday, or Professional Traders
For Wednesday’s regular session, the intraday aggressive models indicate holding the longs unless the index trips the stop trigger and they get sold.
Below 2848, models would stay flat till 2835; below 2835, models would go short with a tight trailing stop (about 6 points). If flat and then the index breaks above 2865, the models would go long with a 5-point trailing stop.
To avoid getting caught up in whipsaws and overtrading, wait for a confirmation of the breakout of these levels on at least a 15/5/1 minute bar, depending on your trading style and risk profile.
(click here to read on the conceptual workings of a trailing-stop)
IMPORTANT RISK DISCLOSURES AND NOTICES – READ CAREFULLY:
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