Traders' A.I.

Model Biases/Outlook:

With the mixed action following the midterm results, our models have adopted a cautious, “indeterminate” stand while between 2795 and 2745. As of Wednesday 11/14, this is updated to a “mildly bearish” stand while below 2755, which would turn outright bearish with a daily close below 2685.

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

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 continue to stay bearish while the index is below 2710. While within the 2710-2770 band, we reiterated an “indeterminate” bias for the market till 11/07.

As of the close on Wed, 11/07, our models negated the indeterminate bias and adopted a “cautiously bullish” bias. This is flipped back to “indeterminate” bias following the midterm election results action and will remain so while the index is between 2795 and 2745. 

As of Wed 11/14, we adopted a “mildly bearish” bias while below 2755. We reiterate this bias for the sixth consecutive day today, Tue 11/20.   

Trading Plans for TUE, 11/20:

Medium-term/long-term Investors

Our medium-term models started the new trading week with a continuation of the streak of consecutive profitable days as below:

Mon 11/12: Booked 21.25 points in profit on a short.
Tue 11/13: Booked 10.50 points in profits on a short. 
Wed 11/14: Booked 15.50 points in profits on a short. 

Today’s Plan/Forecast: For today, Tuesday 11/20, our medium-term models indicate going long on a break above 2727, and indicate going short on a break below 2695 during the regular session – with a 10-point trailing stop. If the index does not cross these level during the regular session hours, the models would stay out of the market.   

Aggressive, Short-term, Intraday, or Professional Traders

The Outcome: The index broke below the 2720 level by 1000am EST, triggering a short position. By 1030am, the index reached an interim low of 2705.76, dragging the 8-point trailing stop’s trigger to 2713.76. This stop was hit in the next 15 minutes and the short was closed – booking a profit of 6 points (depending on your timeframe of your trading bars, some of you might ha
ve ridden this to the low of 2685.87 by noon resulting in 26+ point profit on the short, but in our performance reporting here we assume mechanical trading models behaving in a time-invariant manner to model the worse case scenario). The models stayed flat for the rest of the session.    

Today’s Plan/Forecast: For today, Tuesday 11/20, our aggressive intraday models indicate going long on a break above 2705, and indicate going short on a break below 2685 during the regular session – with an 8-point trailing stop. If the index does not cross these level during the regular session hours, the models would stay out of the market.   
  

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: