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.
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)
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.
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.
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.
The long from 2651 remains active until it hits the stop loss at 2663.
"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.