Saturday, May 19, 2018

S&P 500 OUTLOOK FOR MON, 05/21

Bears putting up a decent fight! Bulls still staying strong!  



As alluded to in the forecast headline for Friday, the bears indeed put up a fight into the weekend and pulled the index down a bit more, albeit in a small way. Astute readers have picked up and excitedly pointed out to me the following from the forecast for Friday, published Thursday night: 

(i) "Tomorrow being Friday, volatility could pick up. Models indicate potential choppy trade within a narrow range of 2710-2730." - the index did trade well within this range, registering the day's low at 2709.18, less than one point from the forecast 2710 level.
(ii) "...use 2720 as a pivot to determine the direction of the trade - long above 2720, and short below 2720" - the index actually registered the day's high at 2719.50 - just half-a-point below the short-term, aggressive model's forecast cutoff to go short! Traders who followed this strategy would have made decent profits today! Congratulations on a disciplined trading!

While I am thankful for such kind notes, I wanted to reiterate this: The kind of performance from my forecast models today and yesterday might strike one as magically (or, spookily) accurate (observing at least two such days just this week alone), it is worth reiterating that quantitative models do NOT consistently work like this - a string of horribly missed forecasts could be just waiting in the wings. Do NOT use my forecasts here (or anyone's) - no matter the past performance - to place trades blindly or over-aggressively.
The most important parameters you need to use in your investment/trading decisions are: your own individual financial situations and your own risk tolerance. Always trade within your risk parameters and do NOT place all-in kind of trades - if done so, it becomes "gambling" and gambling is one sure way to lose all your wealth very fast. Always trade with disciplined risk management rules and using valuable tools to lower "such risk of ruin" and to increase your probability of success.
Happy and safe investing/trading! 


TRADING PLAN FOR MON, 05/21

MARKET MINUTES, FRI, 05/18

IMPORTANT NOTICES & DISCLAIMERS – READ CAREFULLY: 

(i) This article contains personal opinions of the author and is NOT representative of any organization(s) he may be affiliated with. This article is solely intended for informational and educational purposes only. It is NOT any specific advice or recommendation or solicitation to purchase or sell or cause any transaction in any specific investment instruments at any specific price levels, but it is a generic analysis of the instruments mentioned.

(ii) Do NOT make your financial investment or trading decisions based on this article; anyone doing so shall do so solely at their own risk. The author will NOT be responsible for any losses or loss of potential gains arising from any investments/trades made based on the opinions, forecasts or other information contained in this article.
(iii) Risk Warning: Investing, trading in S&P 500 Index – spot, futures, or options or in any other synthetic form – or its component stocks carries inherent risk of loss. Trading in leveraged instruments such as futures carries much higher risk of significant losses and you may lose more than you invested in them. Carefully consider your individual financial situation and investment objectives before investing in any financial instruments. If you are not a professional trader, consult a professional investment advisor before making your investment decisions.
(iv) Past performance: This article may contain references to past performance of hypothetical trades or past forecasts, which should NOT be taken as any representation or promise or guarantee of potential future profits. Past performance is not indicative of future performance.
(v) The author makes no representations whatsoever and assumes no responsibility as to the suitability, accuracy, completeness or validity of the information or the forecasts provided.
(vi) All opinions expressed herein are subject to change at any time, without any notice to anyone.





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