Yesterday’s strategy opined that if 1762 was penetrated and held, then upside targets ranging from 1766 – 1775 could be achieved. That scenario played out like a “well tuned fiddle” as bulls remain dominant and quite enthusiastic regarding continuation of $85B QE, which the Fed is unlikely to change given recent economic weakness. More than two straight weeks of up days suggests on any metric the market is short-term extended and is subject to a pullback. Shorts that have been anticipating that pullback continue to bleed red as the inevitable correction has not materialized…”TRICK or TREAT”…Shortie!
Overnight trade has price extending further above prior day high and has reached the X-Zone (1771.25 – 1772.75) where price is currently trading as of 8:45 ET posting. Continued trade above PDH suggests further upside potential to 1776 – 78 zone.
Traders need to be on high alert of “buy rumor…sell fact” scenario when Fed decision is announcement later today. Given the recent parabolic rise in prices, early trade strategy will be to trade short-side against current overnight high, looking for initial support at PDH (1768), then additional support within CPZ 1761 – 1766 zone. Violation of CPZ low increases probability of 1754 – 58 zone being tested.
Prepare for Anything…Trade the Probabilities.
I am detached from the results. I think in terms of the process and the validity of the process. I understand that I am more than the trading. I do not tie a fragile ego to any day’s trading results. I have faith that over time I will make money. The results of any one trade are statistically unimportant. I think in term of probability. A single trade says nothing about me as a person.