Traders' A.I.

Model Biases/Outlook:

As we reiterated since the midterm elections, “this market is still likely going to be fraught with bull traps rather than bear traps – be cautious when buying into the spikes”. 

The index has tracked our bearish forecasts and has come down to test the key support level of 2610-2620 and even the 2585 level before taking a breather on 12/10, Monday. The market slide resumed on Monday 12/17 with the index closing below 2550. Our models are biased to the bearish side and will remain so while the index is below 2535.

A Brief Trace Back of The Current Bias/Outlook

Thursday, 09/27, our models had negated the previously adopted bullish bias and signaled a neutral bias between 2933 and 2887, which was later updated to 2920 and 2880. 

On a break below 2880 on 10/10/18, our models executed the pre-published trading plan to book 142 points in profit on a short position! Our models have since adopted a “cautiously bearish” bias. This caution is in view of potential spikes up in a whipsaw mode.

As of the close on Wed, 10/24, our models turned bearish and continued to stay bearish while the index is below 2710. While within the 2710-2770 band, we reiterated an “indeterminate” bias.

As of Wed 11/14, we adopted a “mildly bearish” bias while below 2755. With the close below 2685 on Tue 11/20, we updated this to an outright “bearish” bias for Wed 11/21. 

With the close of Wed 11/28, our models negated this bearish bias and adopted an “indeterminate” bias for Thu 11/29. With the close below the key 2535 level (prior level was at 2610), models are now bearish since Monday, 12/17. 

Trading Plans for THU, 12/20:

Medium-term/long-term Investors

Our medium-term models started the month of December with indeterminate state and stayed out of the markets throughout the first half of the month.

Mon 12/17: Booked +20 points in profit on a short
Tue 12/18: Booked +9.25 points in profit on a short

Last Published Trading Plan/Forecast: Our last medium-term forecast stated: “For today, Wednesday 12/19, our medium-term models indicate going short on a break below 2528, with a trailing stop of 12-points” (click here to read the full forecast and/or verify this claim). 

Results/Outcome: The index broke below the 2528 level around 2:55pm EST, triggering a short position with a trailing stop of 12-points. The index reached the session low of 2488.96 within the next ten minutes (around 3:05pm), dragging the stop trigger to 2501.96. The stop was then hit within the next five minutes, and the short position was closed at 2502, for a 26 point profit and the models stayed flat for the rest of the session. 

Aggressive, Short-term, Intraday, or Professional Traders

Today’s Plan/Forecast: For today, Thursday 12/20, our aggressive, intraday models indicate going short on a break below 2503 with a 10-point trailing stop, and going long on a break above 2537 with a 6-point trailing stop. For the trades to trigger, the breaks should occur during the regular session hours (9:30am-4:00pm EST).      
  

NOTE: 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: