S&P 500 INDEX MODEL TRADING PLANS for FRI. 05/05
The strong Non-Farm Payrolls number on top of what Powell had to say yesterday after the FOMC rate decision should have pushed the markets down worried about “higher rates for longer time” but the markets seem to be celebrating mainstream good news for now. The options positioning and the extremely bearish retail sentiment point to this spike up as a potential short squeeze rather than some underlying strength. Wall Street celebrating Main Street’s good news gives something to be wary about!
Our models indicate no confidence in the post-NFP spike up, and are on the side lines for now, with no bullish bias in place yet. Bulls need to be cautious about sudden spikes lower, while bears need to be cautious against taking on any shorts prematurely.
Positional Trading Models: Our positional models, while flashing early bearish signs, indicate no trading plans for today.
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.
Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today.
Aggressive, Intraday Trading Plans for FRI. 05/05:
For today, our aggressive intraday models indicate going long on a break above 4136, 4122, 4102, or 4083 with a 9-point trailing stop, and going short on a break below 4133, 4114, 4095, or 4078 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4053. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:01am 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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