S&P 500 MODEL TRADING PLANS for THU. 05/19

The Battle of 3855 (3854.90, to be precise)

The 20% down level for the S&P 500 Index from its all time high of 4818.62 comes in at 3854.90, which is yet to be breached. After testing the session low at 3858.87 (3855 on the e-mini futures) last Thursday, 05/12, the index rebounded from that level. With yesterday's meltdown evaporating most of those gains, expect a fierce battle for the 3854.90 level today.

Whether the bulls can protect that level today (on a daily close basis) can determine the next leg on the markets. One potential scenario could be that the index briefly breaches the level and then rebounds again - market bears need to be cautious about this "Bear Trap" scenario.

Positional Trading Models: Our positional models indicate going long at the close on a daily close above 3935 today, with no pre-defined stops.

Intraday/Aggressive Models indicate the trading plans below for today:

Trading Plans for THU 05/19:

Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 3865, 3904, or 3937 with a 13-point trailing stop, and going short on a break below 3915, 3898, or 3854 with a 15-point trailing stop. 

Models indicate long exits on a break below 3932 or 3860, and short exits on a break above 3920 or 3860. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31 am ET or later. 

By definition the intraday models do not hold any positions overnight - the models exit any open position at the open of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).

To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.