S&P 500 Trend Continuation Upwards
Updated
A important bullish turning point for the US stock market occured on Friday, February 23, 2018.
Instead of increasing the growing downtrend of the previous days the "S&P 500" ended the week with a bullish push higher, thereby adding to the chance that the market continues the strong move up of the week before towards the all-time high.
Due to the reason that the recovery after the decline has run quite far already though, I recommend to use a stop loss below the recent lows. Here is a recommendation with a good risk/reward of 2 (using instead a tighter stop loss at 2703 offers a better risk/reward ratio of 3).
Entry: 2734
Target: 2828
Stop loss: 2687
Risk/Reward Ratio: 2
Instead of increasing the growing downtrend of the previous days the "S&P 500" ended the week with a bullish push higher, thereby adding to the chance that the market continues the strong move up of the week before towards the all-time high.
Due to the reason that the recovery after the decline has run quite far already though, I recommend to use a stop loss below the recent lows. Here is a recommendation with a good risk/reward of 2 (using instead a tighter stop loss at 2703 offers a better risk/reward ratio of 3).
Entry: 2734
Target: 2828
Stop loss: 2687
Risk/Reward Ratio: 2
Trade active
On Feb. 26 the S&P 500 gapped up and opened above 2757 and closed at almost 2780.On Feb. 27 the S&P 500 declined lower to 2744 (E-Mini dropped to 2742), but not low enough to my entry recommendation at 2734.
Today on Feb. 28 the S&P 500 opened higher. The trade is now active from 2751.
Trade active
Added to the long position at 2714 on March 1 with stop loss 2657 (risk/reward ratio 2 towards the target of 2828)Trade closed: stop reached
The S&P 500 dropped below 2680 on March 1.Trade active
Added to the long position at 2665 on March 1 with stop loss 2585 (risk/reward ratio 2 towards the target of 2828)Note
Murphy's law:"Anything that can go wrong will go wrong".
I was aware of the bull trap risk near the highs which is why I wrote "the recovery after the decline has run quite far already", but I thought worst case the market drops only to around 2667-2674 before advancing again.
But here we are four days later on March 2 and pre-market the S&P 500 futures declined below 2653 ahead of the cash open. Which means the long entry at 2665 could become another losing trade.
Trade closed: stop reached
The S&P 500 dropped below 2651 on March 2.There is now only one long from 2665 with stop loss 2585 alive.
Trade active
Added to the long position at 2651 on March 2 (100 points cheaper than my first long entry) with stop loss 2561 (risk/reward ratio 2 towards the target of 2828)Reason: It looks like a stop loss raid of the 2650 area occured.
Trade closed manually
I closed today the position from 2665 at 2715 which I had opened on March 1.The long from 2651 remains active until it hits the stop loss at 2663.
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