S&P 500 INDEX MODEL TRADING PLANS for FRI. 5/31/24
Our trading plan published on Wed. 5/22/24, stated: “The new record high did indeed come, but the clarity of whether the move up is sustainable or not is yet to emerge”. Wednesday’s post-session blowout earnings from Nvidia briefly drove the markets into a euphoric frenzy coupled with FOMO from investors who might have sat on the sidelines throughout this rally, only to dissipate into a moderate sell off as the session progressed.
In our trading plans published on Fri. 5/24/24, we stated: “It remains to be seen whether that sell off would continue today or if the euphoria and FOMO return”. Price action since then indicates early signs that the sell off could be gaining momentum, but needs to be confirmed with a daily close below our key level mentioned below. This morning’s PCE numbers muddy the waters a bit.
Elsewhere in the markets, the weakening of retail earnings – which are further confirmed with this morning’s earnings misses from major players – could bode some caution for bulls, but the big tech earnings could try to blunt any big blows coming from that side…at least for some time.
Since flipping to a bullish bias on the break of 5116, our models continue to be bullish. Models would carry the bullish bias while the index is above 5245 on a daily close basis. It takes a daily close below 5200 for the models to turn bearish. Between 5245 and 5200, models would be in an indeterminate mode.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 5213, 5233, 5253, 5266, or 5285 with a 9-point trailing stop, and going short on a break below 5211, 5231, 5263, or 5283 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 5273 or 5250, and explicit short exits on a break above 5275. Models also indicate instituting a break-even stop (which would trigger on a break above/below the entry level) once a position reached a 3-point profit level. Models indicate taking these signals from 11:01am EST.
By definition the intraday models do not hold any positions overnight – the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform’s bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) – depending on your risk tolerance and trading style – to determine the signals.
NOTES – HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker’s execution, any slippages, your trading commissions and many other factors.
(iii) For the execution of our models trading plans, a “break above/below” is deemed to have occurred when the index closes above/below (if you are trading by bar close) a specified trading level.
(iv) For the trades to trigger, the breaks should occur during the regular session hours starting at 9:30am ET. By design, they carry only one open position at any given time.
(v) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance – USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
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