Trade of the week: long S&P 500
We would like to go long the S&P 500, despite having been stopped out of the same trade last week. The stop loss will be at 5500, the lows of last week, with an upside target of 5900.
(Partial video transcript)
Previous trading outcomes
Chris Beauchamp: Hello, I'm Chris Beauchamp and welcome to "Trade of the week". Axel, as you may have heard, is off on holiday sunning himself in Mauritius. Lucky for him. So you are stuck with me. For the next two weeks, we'll look at a "Trade for the week". A week beginning Monday the 17th of March, Saint Patrick's Day.
But we'll just look back to a couple of ones because he's still got two running, from my careful reading of Axel’s brilliant spreadsheet. The first one we'll look at, which is the Nasdaq 100. Now, he's been short this one, and well done to Axel for this, from about 21,780, roughly where this line is. And it's down here. So, it's really well and he did, before he left, he said "you might as well close this one out for me because we think it might bounce". So, with his guidance, we have decided to close this one out at around current levels. Not a bad move at all, really. And does quite nicely to improve the choppy record so far with the "Trade of the week".
The one we also have running still is long AUD/USD from $0.6225. And that one, I think we're going to let this one keep going because there might be signs of further upside.
So, if you are keeping track of these, we're closing out the Tech 100, the Nasdaq 100 short from its much higher level. And we are keeping on with the AUD/USD trade.
This week's trading opportunity
Now, this last week's trade, of course, as you may have noticed, was long S&P 500 from roughly where it was now essentially, with our stop at 5,500. Unfortunately for Axel, that was stopped out within hours of this going out, which often happens in these periods of high volatility. It often goes that way.
And I think, though, often in markets you can be right, but early. And I think that's what we were here. So we are going to stick with the idea. It was a good idea. It’s just the stop worked as it was meant to. It stopped us out from further volatility. We had that big rebound on Friday. So we are going to stick with this long S&P 500 trade from last week.
We're going to re-enter it, really, at current levels. It is still a high volatility environment. This may not be a long term bounce. It may only last a couple of weeks. We're not really expecting, at the moment, of this to go back to the bull market we had over the past few months. But we certainly think there's perhaps fuel for a decent sized bounce here in this market after the break downward move.
So, for the week beginning Monday 17 March, we're going to go long the S&P 500, from our current levels of 5,609 or so and our stop at 5,500.
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