S&P 500 INDEX MODEL TRADING PLANS for THU. 7/18/24
We reiterate what we published in our trading plans on Wednesday, 7/17: “Trump’s rhetoric on Taiwan apparently is jolting the markets out of the Trump Presidency 2.0 euphoria, bringing them into the realities of potential geopolitical reckoning and chaos a second Trump term can bring in. With this (sudden?) realization, investors seem to be going back to basics and reflecting on more realistic and important factors (“valuations” anyone?). It remains to be seen how long any such rational considerations would last, especially in the midst of all the hype an election year’s political antics spreads around. For now, bulls need not run for the hills as this morning’s move down could just be a routine profit taking, until proven otherwise.
Last week’s worse-than-expected PPI numbers proved to be a non-event, and now the focus would be on the Q2 earnings season being earnestly kicked off by big banks. The earnings news coupled with the abating concerns on rate cuts uncertainty, the next question on most bulls’ minds would be: “Now that the news is out, should I sell or continue to hold? With 35+ record highs this year alone, does the market have more steam left to keep pushing higher?”. Of course, only time can tell the answer, but the history of rate cuts may be on the side of the bulls.
Since flipping to a bullish bias on the break of 5116, our models continue to be bullish. Models would carry this bullish bias while the index is above 5560 on a daily close basis. It takes a daily close below 5545 for the models to turn bearish. Between 5560 and 5545, models would be in an indeterminate mode”.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 5628, 5616, 5602, 5589, or 5566 with a 7-point trailing stop, and going short on a break below 5627, 5587, 5577, or 5564 with an 7-point trailing stop.
Models indicate explicit long exits on a break below 5601 or 5614, and explicit short exits on a break above 5578. Models also indicate instituting a break-even stop (which would trigger on a break above/below the entry level) once a position hits a 4-point profit level. Models indicate taking these signals from 09:32am 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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