Dave’s Analysis (Feb 4, 2025)

Summary

Background:

The financial markets are currently signaling a potential correction. Multiple factors are contributing to this sentiment, including persistently high interest rates, new tariffs or the anticipation of them, numerous announcements of job losses, and growing fears of inflation on the rise. These elements are creating a climate of uncertainty and caution among investors.

Analysis:

  • Midterm Trend Indicators: My midterm trend indicators are decidedly bearish, reflecting the overall negative sentiment in the market.
  • MACD Indicator: My Moving Average Convergence Divergence (MACD) indicator is also bearish, suggesting downward momentum in stock prices.
  • 14-Day Cycle: There is currently a 14-day cycle in the S&P 500, and it is bearish. This short-term cycle indicates a prevailing downward trend.
  • Gann Slope Index: My Gann slope index is pointing sharply downward, reinforcing the bearish outlook.

As usual, I require price confirmation before taking any action. It’s essential to sell to enter with a stop order to minimize risks.

Recommendation:

  • Action to Take: Sell the S&P 500 e-mini at 6009.25 with a stop order effective on February 5, 2025. Implement a trailing stop loss with a risk tolerance of 54 points to protect against adverse market movements.
  • Managing the Trade: For detailed guidance on managing trades after entry, refer to my trading philosophy for futures available on this website.

In these volatile times, it’s crucial to stay vigilant and manage risks carefully. By following these recommendations, you can navigate the market with a well-informed strategy.

Conclusion:

Happy Trading,

Dave Register Certified Trading Advisor (CTA)

About the Author

Dave Register is ExitPoint’s primary developer and creator of the original ExitPoints systems. With a masters in both Physics and Statistics, over 50 years of experience in management information systems and designing AI systems to accurately predict futures market trading, Dave is a respected member of the trading community. His passion for predicting market trends is both personal and professional, a primary interest that he enjoys sharing with others.

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