S&P 500 INDEX MODEL TRADING PLANS for FRI. 05/26
For today, markets seem to be having a hangover from the post-NVidia-earnings euphoria so far in the regular session, with the hotter than expected inflation numbers released this morning seemingly to have not dented the bullish sentiment. It remains to be seen if it would last till the end of the session and flow into the next week (shortened due to the long weekend).
We started this trading week with our trading plans on Monday titled: “Debt Ceiling Deadline Likely to Whipsaw the Markets”, and these words: “Expect the approaching debt ceiling deadline to attract both bulls and bears to heightened speculation, resulting in some whipsaw movements until the deadline passes and the dust settles”.
Our stance last few weeks has been: “Our models are indicating an initial bias towards an inflection point coming soon. Barring any unexpected bullish development showing up on the horizon, chances are that this could be unwinding to the downside”. With the debt ceiling drama in high gear, expect the markets to be in a whipsaw mode.
Positional Trading Models: Our positional models are short SPX at 4146.33 with a hard stop at 4187, which survived yesterday’s peak. The stop got hit this morning at 10:19am ET, leaving the models flat. Models indicate staying flat for the rest of the session.
By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops – if any – being active in the overnight session.
Aggressive/Intraday Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for FRI. 05/26:
For today, our aggressive intraday models indicate going long on a break above 4203, 4187, or 4167 with a 9-point trailing stop, and going short on a break below 4199, 4183, 4156, or 4140 with a 9-point trailing stop.
Models indicate explicit short exits on a break above 4161 and 4149. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:46am ET or later.
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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