Mostly Geopolitical Headlines’ Noise to Drive the Markets until Next Major Catalyst! Our Models Entering Into a Neutral Bias.
Our S&P 500 Index aggressive, intraday models’ Trading Plans for Wed, 09/26 – published before the markets opened – stated: “For today’s regular session, aggressive intraday models are indicating going long above 2936 or going short below 2913 – both with a 6-point trailing stop” (to verify this claim click here for the full forecast published)
Wednesday’s regular session registered a high of 2931.15 – way below the upper bound of 2936 – and a low of 2903.28 breaking below the lower bound and triggering a short position at 2913, with a 6-point trailing stop.
The trigger of the trailing stop is currently anchored at 2909.28, which would lock in a profit of about 4 points if filled. Not too bad for a wild day such as the FOMC decision day and for a forecast issued BEFORE the market open or the FOMC statement release!
Model Biases/Outlook:
Considering the run-away bull action last week and the gap up on Thursday (09/20) our models had been taking a cautious stance about an anticipated gap-fill down to 2912.50. This gap has been filled Wed (09/26), within a few sessions as anticipated!
Considering that today the political event of the Kavanaugh versus Ford testimony, the markets are likely to suffer political headlines induced gyrations, which may not be that wide. Our models have currently negated the recent “slightly bullish” bias and are currently in a neutral bias. No bearish bias in sight until all the way below 2887.
A Brief Trace Back of The Current Bias/Outlook
On Friday, 09/07, our models had entered an “indeterminate” state and had negated their previous bullish bias, but had not adapted a bearish bias, yet. After reiterating this indeterminate bias for seven consecutive days, our models adopted a “slightly bullish” bias on Wed 09/19.
For Mon, 09/24, we continued this bullish bias, with a cautious stand about the gap-up on Thu 09/20. The next medium-term directional bias will be formed based on if, when, and how that gap would be filled. On Monday this gap-fill was attempted by reaching within 0.13 points – our models want to see it filled fully and sported caution until that is seen. On Wednesday, 09/26, this gap was filled and the market closed down.
Today, Thu 09/27, our models have negated the bullish bias and are adopting a neutral bias between 2917 and 2887.
Trading Plans for THU, 09/27:
Medium-term/long-term Investors
The medium-term models have closed out the last position (a long) for a 12-point profit this week, opened at 2913 on Wed, 09/19 and are currently flat (no positions).
The models indicate trading off of a widened range of 2930 and 2887 – would go long above 2930 and go short below 2887, both sides with a 10-point trailing stop.
Aggressive, Short-term, Intraday, or Professional Traders
For today’s regular session, aggressive intraday models are indicating riding the current short position (entered at 2913 on Wed, 09/26), with the trailing stop currently anchored at 2909.28. If this is hit and closed, the models would trade off of the range of 2923-2893 – would go long above 2923 or short below 2893, both sides with an 8-point trailing stop.
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.
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