TODAY IN THE MARKETS - WED, 5/23

S&P 500 
THE GIST (The "What"):

The index rebounded after reaching the day’s low at 2707.38, erasing some of day’s losses and registering the day’s high at 2731.97 as investors digested these latest developments and as Industrials and Defensive stocks gained. With 7 out of

11 primary sectors ending the day lower, the index closed the session off lows at 2727.76, losing 0.20% (down 5.53 points).

THE DETAILS (The "How & Why"):

 Please check the outlook and forecast for tomorrow, Fri 5/25 below:


The S&P 500 index continues to be range bound between the 2700 and 2745 band, successfully testing the strong support level of its 100 DMA found at 2710 several times this month. Stocks were sent tumbling at the opening after President Trump called off his summit with North Korean leader Kim Jong Un which was due to take place on June 12. Several other news headlines also played in the background weighing down on the market sentiment during the early trading session.

Defensive stocks benefited from the latest developments in geopolitical and trade tensions, led by a rally in Raytheon Company. Industrial stocks also recovered from the sell-off experienced post the trade truce news between U.S and China gaining 0.60%. Meanwhile, global automakers stocks such as Volkswagen AG, Daimler AG and BMW AG fell after President Trump announced his decision to launch a national security investigation on cars imported into the U.S. in an attempt to renegotiate the NAFTA agreement. U.S. automakers such as Ford Motor Co. and General Motors, however, gained over this latest development.

Oil prices fell for the third straight day weighing down on the Energy sector and making it the biggest drag on the index, losing 1.67%. Financial sector lost 0.71% as the 10-year Treasury yield settled at 2.978%, staying below the psychologically important 3% mark. Rising mortgage rates coupled with surging home prices weighed down on the Real Estate sector.

On the economic front, the initial jobless claims reached the highest level in seven weeks at 234,000 as against the expected 220,000. Meanwhile, shortage of properties resulted in the existing home sales to come out below expectations.

S&P 500 OUTLOOK for FRI 5/25

Please check the outlook and forecast for tomorrow, Fri 5/25 below:

https://tradersai.blogspot.com/2018/05/s-500-outlook-for-fri-0525.html

S&P 500 testing the 2715-05 consolidation band AGAIN

https://tradersai.blogspot.com/2018/05/s-500-testing-2715-05-consolidation.html

Bulls relaxed in their territory - no bears in sight...yet!

S&P 500 Market Minutes for today, Mon 5/21:

MARKET ACTION TODAY - THE WHAT:

The S&P 500 index opened the trading week on a positive note, up 12.98 points - riding on the back of easing U.S. and China trade tensions. Led by Industrials and Telecommunication Services sectors, today’s gains were broad based with all the11 primary sectors closing with gains. Maintaining the optimism throughout the session and trading within a narrow range (2,725.70 - 2,739.19), the index closed the trading session up by 20.04 points at 2,733.01, gaining 0.74%.

MARKET ACTION TODAY - THE HOW AND WHY:

To reduce its trade deficits with the U.S., the Chinese government agreed to increase their purchases of American goods and services including agricultural and energy products. In return, the U.S. postponed the implementation of tariffs on Chinese goods valuing up to $150 billion. Benefiting from the easing of trade tensions between U.S. and China, Industrial stocks received a major boost, gaining 1.54% led by a 3.61% in Boeing Co.

Telecommunication Services and Technology sectors with Chinese clients were also amongst the top gainers of the day, up 1.49% and 0.84% respectively, which were further boosted after Micron Technology Inc., raised its profit and revenue guidance for the third quarter. Energy stocks also traded higher supported by high oil prices. The 10-year Treasury bond yield inched lower supporting the day’s gains, settling at 3.06% albeit staying above the psychologically important 3% mark. 

While today’s rally was broad based driven by easing trade concerns, stocks of Steel companies fell on the assumption that the previously announced steel import tariffs by the Trump administration will be put on hold or cancelled. Steel stocks had been rallying after the announcement of a 25% tariff on steel imports. 

S&P 500 OUTLOOK AND TRADING PLAN FOR TOMORROW - TUE, 05/22:

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.

 

 

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.