S&P 500 INDEX MODEL TRADING PLANS for TUE. 12/12
After a brief dip following the NFP release last Friday, 12/08, the index pushed to crack the 4597 level that marks a 20% rise from the markets lows, marking the beginning of a new Bull Market. After the CPI release this morning, the index appears (imputed from the futures levels) to be comfortably set above the 4600 level so far. A sustainable hold above this level after tomorrow’s FOMC rate decision and Powell’s presser could lead to swift gains into the new year, while a failure at it can lead to as swift a drop. We have to wait for the FOMC event tomorrow to get a data-driven look at the real market action.
The retail investor’s bullish sentiment is clocking in at record highs, and all the headline news on the economy and inflation seem pretty good. When everything looks hunky-dory all around, a bit of caution might be warranted. Added to that, the recent spike up sparked by the last post-FOMC rally appears to have gone too far to be sustainable (up 8.92% in November alone), and a potential consolidation ahead is likely warranted.
While a consolidation is likely ahead, our models indicate no immediate threat of a bearish leg as long as the index is above 4582 on a daily close basis.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 4631, 4622, 4600, 4583 with a 12-point trailing stop, and going short on a break below 4619, 4611, 4598, or 4581 or with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4629, and short exits on a break above 4613. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:36am 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) 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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