Traders' A.I.

Model Biases/Outlook:

Considering the run-away bull action last few weeks and the gap up that is yet to be filled since yesterday’s open, our models are cautiously ignoring this close and staying in “indeterministic” state for today and Monday. 

A Brief Trace Back of The Current Bias/Outlook

After 14 consecutive days of bearish bias, our models have negated the bearish bias on last Friday, 07/06/18 when it closed at 2759.82! Since then, our models have been consistently forecasting bullish strength and are yet to flash any concerns about any bears in sight, until Friday, 07/27.

After reiterating the bullish momentum for 21 consecutive days, our models abandoned the bullish bias with the action on last Friday 07/27, but have NOT replaced it with bearish bias yet. We were in this “neither bullish, nor bearish” state until Tue 08/07.

Eight days after the “neutral/indeterminate” bias, our models have resumed the bullish bias as of Tue 08/07. We continued this bullish bias for 30 consecutive days, till Thu 09/06, when the index broke below 2885, a level that our models have been indicating as key for the next directional bias. 

On Friday, 09/07, our models have entered an “indeterminate” state and have negated the bullish bias, but have not adapted a bearish bias, yet. We reiterate this indeterminate bias for fifth consecutive day today.

Trading Plans for FRI, 09/14:

Medium-term/long-term Investors

(this trading plan for the medium-term/long-term investors builds upon the strategy adopted since Tuesday, 08/28)

For today’s regular session, the medium term models indicate an “indeterminate” bias and waiting to analyze the daily closes today and Monday, Sep 17th. Thus, the medium term models are going to stay flat and out of the markets until the end of the session Monday, 9/17. 

Aggressive, Short-term, Intraday, or Professional Traders

Consistent with the trading plan, our models went long after the first 10 minutes of the regular session, at 2902.65, with a trailing stop of 6 points. With the index reaching the session high at 2906.76 in the next 15 minutes, the trailing stop was anchored at 2900.76, which was later hit and the position was closed for a loss of about 2 points. The models have been flat since then. 

For today’s regular session, models indicate trading off of the trading range of 2919-2905 intraday. The models would go long on a break above 2919, and go short below 2905 – both with a 6-point trailing stop.   

To avoid getting whipsawed, ignore at least the first 10 minutes of market action, and wait for a confirmation of close above/below the key levels on a 60-min, 30-min, 15-min or lower granularity chart, depending on your trading style and risk appetite.  

If a position is opened and later the trailing stop is hit, then the models indicate staying flat for the rest of the session. 

Remember that a “trailing stop” works differently from the traditional stop-loss order. Please bear in mind that the trailing stop’s trigger level would keep changing throughout the session (click here to read on the conceptual workings of a trailing-stop). 

IMPORTANT RISK DISCLOSURES AND NOTICES – READ CAREFULLY:

(i) This article contains personal opinions of the author and is NOT representative of any organization(s) he may be affiliated with. This article is solely intended for informational and educational purposes only. It is NOT any specific advice or recommendation or solicitation to purchase or sell or cause any transaction in any specific investment instruments at any specific price levels, but it is a generic analysis of the instruments mentioned.

(vi) All opinions expressed herein are subject to change at any time, without any notice to anyone.