How Long Will This Precarious Rally Continue?

28 juil. 2023

S&P 500 INDEX MODEL TRADING PLANS for FRI. 07/28

In our trading plans yesterday, we published: "The risk continues to be to the downside, so longs might want to be cautious; however, bears have to wait for their opportunity strike and not jump the gun". There was a little pull back - bears should not rejoice, yet.

The question on everybody's mind - whether they are a bull or a bear or a bystander - is: "How long can this rally continue?". And, nobody knows - or, can know - the answer, of course. But, as long as there are doubters, the rally will still have some steam left in it - mostly, feasting on short squeezes.

The rest of this week's earnings should shed some more light on how the markets are shaping up in the wake of the sticky inflation. If they continue to appear to be on track or with a bias to the upside surprises then the next bull leg could get well entrenched. But, If the earnings show any unexpected weakness ("unexpected" is the key word there), then we might have seen an interim top.

The previously stated level of 4575-4580 is now the key support/resistance level, with the 4603-4610 range the next resistance level.

Aggressive, Intraday Trading Plans:

For today, our aggressive intraday models indicate going long on a break above 4598, 4584, 4575, or 4555 with an 8-point trailing stop, and going short on a break below 4588, 4570, 4563, 4550, or 4535 with a 9-point trailing stop. 

Models indicate explicit long exits on a break below 4545 or 4580, and explicit short exits on a break above 4540 or 4583. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:01am EST 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.

Positional Trading Plans:

Our positional models continue to indicate staying out of the markets until otherwise stated.

By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an index-tracking instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session.

(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!) 

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.

#spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #earnings