S&P 500 INDEX MODEL TRADING PLANS for WED. 2/28/24
The markets appeared drunk and exuberant about NVidia’s blowout earnings, and whatever else it may be, and now looks like it is in a hangover mood. Whether Greenspan would label it “Irrational Exuberance” is probably something some market observers might be wondering about.
As per our trading plans published on Friday, 2/9/24: “4975 is the immediate support level, and 5027 is the next main resistance level to watch for”. On that day, The index closed at 5026.62 – just under 0.4 points away from that level. As we indicated in our trading plans of Friday, 2/16/24: “as long as the index is above 4975 on a daily close basis, shorts should be patient and not jump the gun”. And, we reiterated it on Tuesday, 2/20: “This 4975 level could be re-tested today”. That level was indeed tested and the index closed at 4975.51 – just about half-a-point above the level! That proved to be an interim bottom, as the index recovered to close at 4981.81 on Wednesday, 2/21, only to climb back up to the 5100 level by Friday’s close.
The Nvidia/A.I. exuberance has the index continuing to print new all-time highs. This is an uncharted territory for the markets, and our models are turning a bit cautious albeit nowhere close to adapt a bearish bias as long as the index is above 4945 on a daily close basis, regardless of the valuation concerns and the stickier-inflation concerns.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 5078 or 5051, and going short on a break below 5076, 5069, 5058, 5049, or 5038.
Models indicate explicit short exits on a break above 5070, 5060, or 5041. Models also indicate instituting a break-even stop once a position reached a 3-point profit level. Models indicate taking these signals from 11:31pm 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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