Looks like volatility is the “key word” for 2015…as price vaulted to our projected upper target zone 2045 – 2050 early, only to be bested by hitting our lower projected price target of 2008 all in the same trading session yesterday…Now THAT IS VOLATILITY!
We knew from yesterday’s Daily Trade Strategy 01.13.15 odds (70%) favored a decline greater than 10 handles and (44%) decline greater than 20 handles sometime throughout the trading session…Projected Low was 2004.75…Actual Low = 2001.00.
Today is Cycle Day 2 (CD2)…Upper and Lower Range Targets have both been satisfied, so this may make for some choppy, confused trade in today’s session…We will continue to maintain our trade discipline with entries and exits.
Odds of Rally > 10 = 83%; Odds of Rally > 20 = 44%; Average Range on CD2 = 14.50; Max Average Range = 22.50; Possible High = 2061.50 based upon penetration of PDH (2051.75); Possible Low = 1982.25 based upon violation of PDL (2001.00)
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Scenario 1: IF price can find responsive buyers in sufficient size and and hold above PDL (2001.00), THEN there is a 60% chance of retracement rally back to 3D CPZ 2028.00 – 2035.00. Above this zone targets 2044.50.00, then 2051.75.
Scenario 2: IF PDL (2001.00) is violated and converted, THEN probabilities (30%) favor a move down to test lower range parameters 1990.00, with deep extreme measuring 1982.25.
Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus of Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.
Stay Focused…Non-Biased…Disciplined ALWAYS USE STOPS!
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.