We're in full earnings season, so the market is expected to move erratically from a technical point of view.
From a fundamental perspective, we expect well performing banks to lead the S&P500 earnings season as top performers for one simple reason: interest rate hikes should have a considerably positive impact on their income. We don't know if that is enough to drag the index to all-time highs since the market had already partially, if not fully, priced in the impact of a higher interest rate on company earnings.
We would look for the E-mini S&P to test the 2344.00 area then fall to 2320.00 area.
If the market doesn't gap up over our entry level after the holidays, and the short-term trend started with this quarter's earnings period (April) holds, our setup is validated and we can safely short the E-Mini S&P with a relatively tight stop (~17 ticks) and a take profit of at least 50-60 ticks.
We are also keeping an eye on the 2334.00 level to see how price action reacts to it.
From a fundamental perspective, we expect well performing banks to lead the S&P500 earnings season as top performers for one simple reason: interest rate hikes should have a considerably positive impact on their income. We don't know if that is enough to drag the index to all-time highs since the market had already partially, if not fully, priced in the impact of a higher interest rate on company earnings.
We would look for the E-mini S&P to test the 2344.00 area then fall to 2320.00 area.
If the market doesn't gap up over our entry level after the holidays, and the short-term trend started with this quarter's earnings period (April) holds, our setup is validated and we can safely short the E-Mini S&P with a relatively tight stop (~17 ticks) and a take profit of at least 50-60 ticks.
We are also keeping an eye on the 2334.00 level to see how price action reacts to it.
Comment:
The E-Mini S&P500 almost got to the area where we're looking to sell. The trade is setting up nicely so far.
Comment:
Side-note: price action completely disregarded 2334-2335 area.
Trade active:
We have entered the short @ 2345.00, stops 20 ticks, take profit: 75 ticks
Comment:
If price action breaks below 2335.00, we are trailing our stops at +22 ticks above break even (BE - comissions @ 2345.00)
Comment:
Right now we recommend trailing stops at break even + comissions.
Trade closed: stop reached:
We got stopped out today on our trailed stop.