Traders' A.I.

Model Biases/Outlook:

For the last few sessions, our bias has been: Considering the run-away bull action last few weeks and the gap up that is yet to be filled since last Thursday’s open, our models are cautiously ignoring the apparent bullish action and staying in “indeterministic” state for today, Monday, 09/17. 

Given that the gap is filled on 09/17, our models currently sport a slightly bullish bias for Thu, 09/20, for the second day in a row, with no bearish concerns until all the way below 2875.  

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. After reiterating this indeterminate bias for seven consecutive days, our models now have adopted a “slightly bullish” bias on Wed 09/19. 

For Thu, 09/19, we reiterate this “slightly bullish” bias for the second day in a row.  

Trading Plans for THU, 09/20:

Medium-term/long-term Investors

For today’s regular session, the medium term models indicate a “slightly bullish” bias. For the second day in a row, our medium term models indicate going long above the break of 2913 on the index level, with a stop-loss at 2892. 

There is no bearish concern until all the way below 2875. If the stop is hit at 2892, stay flat between 2875 and 2892.   

Aggressive, Short-term, Intraday, or Professional Traders

Our Aggressive, Intraday Trading Plans for Wed, 09/19 stated: “The models would go long on a break above 2906, and go short below 2885 – both with a 6-point trailing stop.” (to verify this claim click here for the full forecast published) 

Accordingly, our intraday models went long within the first 30 minutes of the session at 2906.25 with a 6-point trailing stop that was anchored at 2906.36 on the session’s high. The trailing stop was hit later and the long was closed at break-even. As per the published trading plan, the models went long again on a break above 2906 later in the day and are currently long from 2906.25 and sitting on a profit of about 1.5 points as of the close of the regular session. 

With the post-trade high registered at 2910.21 around 3:50pm, the trailing stop on the long was anchored at 2904 at the close of the session (traders who are using e-mini futures on the index may take advantage of the overnight session’s moves and trail the stop along those moves to capture any favorable moves).  

For today’s regular session, aggressive intraday models indicate carrying the long trade until the trailing stop is hit (remember, the trailing stop floats with the market’s move up but remains constant when the market goes down). 

If the trailing stop is hit, then the models indicate continuing the trading with the same strategy for the day.  

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.