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. 

The gap up is now filled with Monday’s close piercing below the close of Wed, 09/12 – if not trade war jitters, something else would have appeared as a “reason” for the last couple of declining sessions, but we attribute it to the technical nature of the gap up from Thursday as our models pointed out! 

Now that the gap is filled, the real bias of the market action reveals itself in the market action today, Tuesday, 09/18 and our models are currently on hold to form any bias until today’s regular session’s close. 

Our models indicate the risk of a spike to the upside rather than to the downside, barring any significant geo political developments on Tuesday. 

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 seventh consecutive day today, and anticipate to read into the directional bias after the session close today, Tue 09/18.

Trading Plans for TUE, 09/18:

Medium-term/long-term Investors

(this trading plan for the medium-term/long-term investors builds upon the strategy adopted since Tuesday, 08/28, and is the same as that published for Friday, 09/14)

For today’s regular session, the medium term models indicate an “indeterminate” bias and waiting to analyze the daily close later today, Tuesday the Sep 18th. Thus, the medium term models are going to stay flat and out of the markets until the end of the session Tue 9/18. 

Aggressive, Short-term, Intraday, or Professional Traders

Our aggressive, intraday trading plan published for Monday, Sep 17th, stated: “The models would go long on a break above 2919, and go short below 2905 – both with a 6-point trailing stop” (click here to read the full text and/or to verify this claim) 

Accordingly, our models went short after the first 10 minutes of the session on the break below 2905 and got filled at 2900.50 (on the index level), rode the short all the way to session lows at 2886.16 at which point the trailing stop got anchored at 2992.16 on the index level. Later, this was triggered and the short was closed for a 8 point profit, and the models stayed flat for the rest of the session. 

For today’s regular session, aggressive intraday models indicate trading off of the range of 2903-2885 during the regular session. The models would go long on a break above 2903, and go short below 2885 – 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 spe
cific 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.