Traders' A.I.

Model Biases/Outlook:

The nature and the quality of the S&P 500 Index’s breakout to new high on Monday confirms the strength of the current breakout and the slightly bullish bias that our models adapted for 21 consecutive days is now upgraded to a clear bullish bias. 

The daily close above 2875 of Monday, 08/27, confirmed the credibility of the current bullish momentum. Our models indicate that there is no risk to the current bull run while the index is above 2855. On the other hand, the index has to close below 2840 for the bullish momentum to indicate any slowdown.  

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 continue this bullish bias for the twenty first day today, Tue 08/28!

Trading Plans for TUE, 08/28:

Medium-term/long-term Investors

Medium term models indicate a bullish state for the S&P 500 Index, mainly driven by the historic market action last week and the strong breakout on Monday, 08/27.

For today’s regular session, the medium term models indicate a long bias. Considering the runaway bullish action yesterday, the medium term models indicate going long (buying) after a bit of consolidation below 2885 AND then a breakout above 2885, if it were to occur. If such a consolidation entry opportunity does not present itself, models indicate not chasing the bull but wait for a decent entry point. 

If the break-above-from-below 2885 position were to be filled, then a 12-point trailing stop would be placed. 

Note 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). 

Aggressive, Short-term, Intraday, or Professional Traders

Intraday aggressive models are currently holding a long position from Monday, 08/27, entered at 2878.25. In accordance with the trading plan of Monday, 08/27, the position has a 6-point trailing stop which is currently anchored at 2890.74 on the index level.  

For today, Tuesday 08/28, the models would ride the current long position until the trailing stop is hit or until a different strategy is indicated. If the trailing stop were to hit and close the current long position, the intraday models indicate going long – with an 8-point trailing stop – on a subsequent break-above of 2885, if it were to present itself. 

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.