GS Stock | Goldman Sachs Trading Journal with VantagePoint

VantagePoint Trading Software is a forecasting tool that uses both end of day data and artificial intelligence to provide traders a forecast of market movement. These forecasts are 1-3 days in advance and help traders improve their timing on making trades and maximizing profit potential. The artificial intelligence software forecasts market movement for stocks, futures, Forex and ETFs. GOldman Sachs, GS stock, is in focus today…

This journal entry looks at the recent market movements of Goldman Sachs NYSE: GS

VantagePoint Trading Journal GS Stock

The potential for a federal government shutdown seems to be largely shrugged off this morning as the broad U.S. indexes are unchanged to moderately positive.  This is certainly what traders call a holding pattern.

To avoid a shutdown in our trading account, we can use the artificial intelligence forecasting software VantagePoint to analyze markets at all levels. Whether you are looking for individual stocks, futures or ETFs, stock sector rotations, or broad indexes like the S&P, Dow, and the Russell, VantagePoint can easily compile that data. Today, we will focus our efforts on Goldman Sachs, GS stock.  Let’s look at the chart:

image of GS stock trading diary with VantagePoint
VantagePoint recently indicated a potential downside breakout in GS due to a bearish crossover on 1/17/18.

Using the predictive indicators embedded within the VantagePoint platform and its predictive AI technology, we will point out two significant things. We have a bearish crossover indicated by the blue predictive indicator line crossing below the black, simple 10-day moving average on 1/17/18. We can combine that with the VantagePoint propriety neural index indicator moving from the one (1) to the zero (0) position. This indicator measures strength and weakness for a 48-hour period.  The move to the zero (0) position indicates weakness and further makes the case for a potentially bearish scenario. That’s why one could consider entertaining a setup to the downside.

Strategy Discussion

If one traded straight stocks, selling GS stock in the $251.50 area could prove to be prudent. You are anticipating a move to the downside. It’s also a conservative way to enter GS without the limitation of time associated with other strategies. It would also be good practice to place a buy-stop order in the $257.00 area to mitigate potential losses.

For more active traders with a shorter investment time horizon, consider a setup utilizing options. Taking a passive, premium credit approach may be the best path to success.

The sale of a credit call spread may be one way to approach this situation. It is optimal to collect the most premium in an options set up like this. Selling a strike close to “at-the-money” and buying a further out call as protection would be most prudent. We could look at the sale of the February 255/260 call spread collecting $1.85. This will yield a risk to reward ratio of 1.70:1.  This is calculated by taking the width of the spread less any premium collected and dividing by the premium collected.

Given the trading and market environment outlined above, a trader must evaluate whether this reward/risk ratio is appropriate for his/her risk tolerance.

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tylerr@tradermarketinggroup.com'

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