Traders' A.I.

Model Biases/Outlook:

Considering the run-away bull action last week and the gap up on Thursday (09/20) our models are cautious about an anticipated gap-fill down to 2912.50. Given this, our models currently sport a cautiously bullish bias for Wed, 09/26 with no bearish concerns until all the way below 2905. 

This gap-up has been tested with Monday’s action reaching the low of 2912.63 – just 0.13 points away from filling the gap! Now, this could be interpreted by different models as being filled or not filled. Our models are taking this action with a bit more caution than not and want to see it filled cleanly (by market reaching below 2912.50 – the deeper the better). 

Considering that today the FOMC is going to announce the interest rates decision at 2pm EST, followed by Chairman Powell’s press conference at 2:30pm EST, our medium-term models indicate staying on the side lines for today’s session.    

A Brief Trace Back of The Current Bias/Outlook

On Friday, 09/07, our models have entered an “indeterminate” state and have negated their previous bullish bias, but have not adapted a bearish bias, yet. After reiterating this indeterminate bias for seven consecutive days, our models have adopted a “slightly bullish” bias on Wed 09/19. 

For Mon, 09/24, we continued this bullish bias, with a cautious stand about the gap-up on Thu 09/20. The next medium-term directional bias will be formed based on if, when, and how that gap would be filled. On Monday this gap-fill was attempted by reaching within 0.13 points – our models want to see it filled fully and are sporting caution until that is seen. 

Trading Plans for WED, 09/26:

Medium-term/long-term Investors

As detailed at the top of this report, the medium-term models have closed out the long position for a 12-point profit, opened at 2913 on Wed, 09/19 and are currently flat (no positions). 

Considering that today the FOMC is going to announce the interest rates decision at 2pm EST, followed by Chairman Powell’s press conference at 2:30pm EST, our medium-term models indicate staying on the side lines for today’s session. 

Aggressive, Short-term, Intraday, or Professional Traders

For today’s regular session, aggressive intraday models are indicating going long above 2936 or going short below 2913 – both with a 6-point trailing stop. If a position is opened and later the trailing stop is hit, then the models indicate staying flat for the rest of the day. 

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.