Long Risk Call Profits

We were right on point once again. Exactly a week earlier, we made a public call for global stocks to rally. Specifically, we were short term bullish selected equity indices including but not limited to the SPX (S&P 500), the Hang Seng index (Hong Kong), and other emerging market stocks. We couldn't have been more on point.

Because exactly 7 days after making that particular call, the SPX (we specifically traded this) rallied more than 60 points (+3.1%) at its highs on Friday, reaching our preset primary objective of 2000 on the index. Now that this has passed, what next? In this short trading piece, we share some of our thoughts.

Before we continue, it is important that you understand all of the trading content we put out on these pages are real trades on a real account that we trade ourselves. We're using real capital and trading live prices. You can find out more about our trading system here. You can also view our entire trading journal here. In publishing such articles, we want to help traders from all walks of life better understand how successful traders approach the markets, and translate ideas into actions.



Continuing, we do expect more upside to equities but will be playing it more cautiously. This week brings a flurry of central bank meetings/policy decisions including the much anticipated ECB meeting on 10 March which the market widely expects to be in the form of more QE and lower interest rates.

We reckon that should the ECB disappoint (something we discussed on our Facebook page recently) by failing to increase (or by an amount deemed too sparse) both the size of their PSPP, and also further lowering the overnight deposit rate (already negative now), global markets wouldn't be too happy. In this case, we might get an abrupt reversal in the medium term bull trend in global indices.

We are henceforth expecting more volatility in the prevailing trend and will be positioning accordingly. For the record, we were long SPX on 2 positions last week, both had their take profit limit orders filled at 2000 (our private target). Many of our Premium Subscribers took those trades and were rewarded.

 A before & after juxtaposition of 2 daily charts on the S&P 500 index; the top chart we plotted last week (1 March), the bottom chart we plotted today (8 March).  When we made our bullish call, there was already clear technical signs of strength, signs that buyers were mostly in control although key resistance levels lied ahead; such as the declining bottom channel buffer which you can see price clearly challenging prior to the breakout we got on Wednesday.  Ultimately we had 2000 as our primary target as it was very clearly an area which the market respected in the past; while also acting as an important pivot zone for price action. This objective was attained on Friday when SPX spiked to a high of 2012 before closing a few ticks below 2000. Exactly what we expected.  Right now, we expect more upside before prices meet a more significant bout of selling. As annotated, our next objective/target is the declining upper channel buffer which should act as dynamic resistance going forward. 

A before & after juxtaposition of 2 daily charts on the S&P 500 index; the top chart we plotted last week (1 March), the bottom chart we plotted today (8 March).

When we made our bullish call, there was already clear technical signs of strength, signs that buyers were mostly in control although key resistance levels lied ahead; such as the declining bottom channel buffer which you can see price clearly challenging prior to the breakout we got on Wednesday.

Ultimately we had 2000 as our primary target as it was very clearly an area which the market respected in the past; while also acting as an important pivot zone for price action. This objective was attained on Friday when SPX spiked to a high of 2012 before closing a few ticks below 2000. Exactly what we expected.

Right now, we expect more upside before prices meet a more significant bout of selling. As annotated, our next objective/target is the declining upper channel buffer which should act as dynamic resistance going forward. 

Technically speaking, we do not consider price to have cleared the critical resistance zone at the 2000 big figure. We tailed above the level briefly on Friday, but that was a weak close if we isolated that daily candle by itself. We won't be surprised to see a relatively sharper pullback into short term pullback buying zones (which we will not publicly detail for the respect of our Premium Subscribers).

Once again, subscribers to our Premium Signals Service were kept updated in real time on all of our positions and had exclusive first hand insight to our trading activity as it unfolded. Many of them were long SPX with us and made a decent amount of profits. Congrats to those that did!