Traders' A.I.

Model Biases/Outlook:

On Thursday 09/06, for the first time since we forecast the bull consolidation, the index closed below the 2885 level – it closed at 2878.05 that day – followed by a lower close at 2871.68 on Friday. 

Thus, our models (both medim-term and aggressive intraday models) have now entered into an “indeterminate” state, until further action around the key levels mentioned below confirm any directional bias. 2893 and 2863 are the next key levels our models are closely monitoring for a daily close.  

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 thrid consecutive day today, Wed, 09/12. 

Trading Plans for WED, 09/12:

Medium-term/long-term Investors

(this trading plan for the medium-term/long-term investors builds upon the strategy adapted since Tuesday, 08/28)

For today’s regular session, the medium term models indicate an “indeterminate” bias and waiting for a daily close above 2893 or below 2863 to take any directional trades. Thus, the medium term models are going to stay flat and out of the markets until the end of the session today, Wed, 09/12. 

(To avoid getting whipsawed, wait for a confirmation of close below this level on a 4-hourly or hourlychart, depending on your trading style and risk appetite)  

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

After closing a 10-point bagger short position opened and closed on last Thursday, intraday aggressive models are currently flat (for the last three sessions, the index tested our key levels forecast for each day, but did not stay above/below those levels even on a 5-minute bar). 

For today, the intraday models indicate an indeterminate stand, owing to the recent record highs and the ongoing trade tensions, coupled with the index’s break below the models’ key level for the last three sessions. 

For today’s regular session – considering the potential inflection point the market could be testing – models indicate trading off of a rather wide trading range of 2893-2863 intraday. The models would go long on a break above 2893, and go short below 2863 – both with a 7-point trailing stop. 

To avoid getting whipsawed, ignore at least the first 10 minutes of market action, and wait for a confirmation of close 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 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.