S&P 500 INDEX MODEL TRADING PLANS for TUE. 7/16/24
With the sad and somber developments over the weekend in the nation’s politics, the financial markets appear, as of this morning, more resilient and focused on the earnings and the upcoming rate cuts, while also factoring in the increased odds of Trump Presidency 2.0.
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.
On the price action front: The break out to new highs over the holiday-thinned markets was confirmed this week so far with a follow through, albeit modest. It remains to be seen if Powell’s second day of testimony today would cement it as the beginning of a new leg up or if the new high will fizzle out, trapping any bulls betting on the leg up.
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 5515 on a daily close basis. It takes a daily close below 5445 for the models to turn bearish. Between 5515 and 5445, models would be in an indeterminate mode.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 5676, 5652, 5628, 5597, or 5566 with a 9-point trailing stop, and going short on a break below 5649, 5627, 5596, 5564, or 5674 with a 9-point trailing stop. For today, Models indicate taking these signals on at least a 5-min timeframe or higher.
Models indicate explicit short exits on a break above 5542. 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 10:16am 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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