Pressure continues to build for an upside breakout, but before getting too excited, we need to keep recent action in perspective. Uptrend has been very symmetrical as buyers respond to any significant pullback…Value Area has also been slowly creeping higher..certainly a bullish sign…Cumulative Delta reading continues to be suspect as price probes higher…not everyone is convinced of further upside. Now this could certainly be hedging of long positions which is to be expected, so in any case, upside enthusiasm appears to be muted.
Overnight probe of Monday’s high keeps the upside pressure intact, though no new expansion high…perhaps that comes today, or next week when beginning of month mutual fund inflows occur…Good time for the “BIGS” to unload long positions…to the unsuspecting retail mutual fund investor.
We’ll continue to “stay the course” of buying pullbacks as this seems to be the path of least resistance. Pullback to 1844 – 46 zone should provide ample support, so we’d be buyers back into this zone. Failure to hold this area suggests renewed selling interest and targets 1838 – 40 zone.
IF price does indeed breakout and convert recent high, THEN we are looking for push higher into 1858 – 1862.50 zone.
Stay Nimble and Flexible!
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.
In yesterday’s trade strategy, trade scenario #2 played out nicely…Here’s an excerpt: “Failure to convert 1851 forces further consolidation action within yesterday’s range parameters. Violation and conversion of prior day low (PDL) calls for reassessment of bullish scenario, targeting 1829 – 31 zone, then, 1824 -27 zone.”
There was significant overhead resistance at the Stat-X Zone, which offered the Bears a nice reversal point from which to initiate shorts. By session settlement, price had pushed down approximately 15 handles to the lower Stat-X Zone, which contained further damage.
Overnight prices have pushed down a bit further very near to our projected support zone near 1831 level, which forms a very nice symmetrical two-wave pullback. Currently, price is now below the 3-Day Central Pivot Zone (3D CPZ), so bulls need to squelch any additional selling and hold globex lows.
Failure to hold globex lows projects 1824 – 27 zone and further to Stat-X Extreme 1821! Resistance now becomes 1844- 46 zone and is a major hurdle for the bulls to overcome.
Trade Strategy for today is to be sellers on bounces that fail to carry, looking for the bear camp to force some long liquidation. We will always be respectful of the Bulls tenacity and strength as the bigger picture remains very much bullish.
Remain Disciplined and ALWAYS USE STOPS!
I am ready to trade. My patterns are verified. My homework is complete. My mind is clear. I have rehearsed everything. I am prepared strategically, emotionally, and financially each and every day
Monday’s breakout was followed up by a neutral consolidation (inside day) which so far has held the important 1840 handle. Continuation of this pattern should set the stage for another move higher in the coming days. It’s critically important that the bulls absorb any selling that does develop above the 1840 handle…benefit remains in the Bull Camp.
Today is Cycle Day 3 (avg range: 17.75) with favorable odds of higher prices by today’s settlement, as long as price penetrates and converts prior day high (PDH) 1851. IF this scenario develops, THEN recent high at 1856.25 is “in-play” with higher targets 1860 – 62 zone.
Failure to convert 1851 forces further consolidation action within yesterday’s range parameters. Violation and conversion of prior day low (PDL) calls for reassessment of bullish scenario, targeting 1829 – 31 zone, then, 1824 -27 zone.
I am disciplined. I behave in a way to reach my goals. I do what I intend to do. I have the intent to win through right actions. I will be patient for patterns to emerge and mature. I am decisive. I decide easily and act promptly. I act in the right way and right on time. When there is nothing to be done, I will wait.
Even Captain Ahab knew that Moby Dick could not stay submerged forever and had to come up for air..Such as with the recent price action of the S&P. The Bears have tried multiple times to keep price “submerged”, only to have it rise even more until finally…”She Breaches!”
Next question to be answered is whether or not Mr. Mkt will stay buoyed above the 1840 handle zone (breakout zone), or re-submerge? We’ll continue to give the benefit to the Bulls as long as the breakout zone continues to hold, so buying the pullbacks will be the broader trade strategy.
Today marks Day 2 of current Cycle, which typically unfolds as “backing ‘n filling” price action. Today’s inferences will be: If price holds the 1840 handle breakout zone pullback, penetrates and converts 1845, then this will suggest buyers view the breakout as new value opportunity. Upside price targets on renewed buying are 1848 – 52 zone, then prior high at 1856.75.
Failure to hold breakout zone suggests yesterday’s price action was nothing more than a major “stop-run” for the shorts. Any deeper pullback would target 1835 38 zone, then 1829 – 31 zone.
“Advantage Bulls”…for now!
I am courageous and I always act, even in the face of uncertainty and possible loss. Do not say, no fear. Feel the fear and act anyway. I may be frightened, but I still saddle up. I am not reckless. I act promptly in accordance with my methodology. I respect my calculations. I have a healthy respect and I balance that respect with my courage. I am an explorer. I am on a hero’s journey.
There continues to be a “battle for breakout” at the 1840 – 43 zone…Multiple attempts have not been successful, but the pressure continues to build. Resolution should come this week…
Failure to convert 1843 on Friday’s options expiration resulted in a weak closing print. Additional overnight weakness has been only minor down to StatX Zone between 1830 – 1832. This will become “key reference zone support” on any price retracement. Failure to hold this zone suggests bulls are disinterested with multiple lower price points layered between 1828 – 22.
IF price can hold Prior Day Low (PDL), THEN bulls can mount yet another upside attack at the 1842 – 44 zone. Successful penetration and conversion of this zone suggests renewed strength, with upside price targeting 1850 – 55 zone.
Stay Disciplined and Always Use Protective Stops!
I know anything can happen, and I can handle anything that does happen. I am open minded. My thoughts and perceptions are clear. I know what to look for. I have rehearsed everything. I adapt to change. I will listen to my indicators and the patterns that emerge. I will adjust and not demand that things continue as they first started.
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D-Level / Stat-X Zone Short Setup: http://stocktwits.com/message/20275741
Money Box Target Zone: http://stocktwits.com/message/20024175
CCI X-Over System (Discount): http://stocktwits.com/message/20121149
CCI X-Over System (Discount): http://stocktwits.com/message/19930275
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Stat X-Zone Reversal Short: http://stocktwits.com/message/19969931
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Yesterday’s anticipated demand zone (1818-21) proved to be the correct level from which to buy the pullback. Wednesday’s intra-day reversal without a confirming following-thru day only provided the bulls and opportunity to “buy the dip”. We cannot argue with the recent strength and resolve of Mr. BIG”…Da Bears are learning the hard way!
S&P’s are back to 1840 handle and again within a whisker of a breakout and probabilities favor this outcome. Options expire today, so perhaps that will provide the buying catalyst through 1840’s this time as there has been lack real demand above this zone.
IF price penetrates and converts the 1840’s, THEN upside targets 1845 – 50 initially with lots of room to propel to 1860. Support continues to be 1818 – 21 zone that was tested in prior session…Any violation of this zone calls for re-evaluation of current bullish bias. The CPZ and 3D CPZ have an overlap between 1828 – 32 zone, so this area will be significant “marker” on any pullback as it’s multi-day “high volume node” (HVN).
I will identify my mistakes and learn from them. I am optimistic, realistic and honest. I will not make up stories about the good or bad things that occurred in the past or are happening now. I admit when something is not working. My optimism gives me faith and courage. I will not fall prey to blame and fear.
Excerpt from yesterday’s post..”Prior Cycle targets have already been achieved, so today can either go the way of bulls or bears…” “…but as we know markets can reverse at anytime, so we remain disciplined with our trading.”
As we opined in prior blog, price did accelerate higher early in session and stalled just shy of upper targets, then reversed hard into the “noon balloon…noon swoon” timezone. Recall that the 1840’s handle failed to attract new buying late January…Retest of same level was rejected hard yesterday marking an “Outside Day” with increasing volume…bearish indeed..short-term.
Key Zones for today are: StatX Zone 1818 – 21. Look for some price stabilization within this zone. IF price fails to find sufficient buying interest, THEN 1808 – 1812 zone comes into play. We would anticipate upper resistance 1824 – 28 initially, with more significant supply near 1832.00
I can recover from any setback. I have an attitude of abundance. I affirm abundance in the universe. I know I cannot begin to count the stars. I realize the ocean doesn’t care whether I go to it with a bucket or a teaspoon. I know the market provides a river of opportunities. I invest in my capabilities. I will be happy with my results.
Quiet consolidation near highs typifies current action with no real change in trade strategy outlined in yesterday’s blog post. Here is a re-posting:
Prior Cycle targets have already been achieved, so today can either go the way of bulls or bears…If the bulls continue their torrid buying, penetration and conversion of 1840.25 high increases probabilities of an accelerated move to 1846 – 50 zone. Failure to convert recent high, calls for pullback to retest 1830 32 zone..Any deeper pullback below this zone targets the 3D CPZ between 1826 – 29 zone. Current momentum suggests higher likelihood of 1850′s being within reach, but as we know markets can reverse at anytime, so we remain disciplined with our trading.
Remain Vigilant and 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.
Markets took a time-out to honor this Great Country’s past Presidents. Today we refocus our attention to the business of trading. Quiet holiday trade session starts us off we we ended Friday’s session. Bullish mode within a whisker of challenging the highs near 1850.
Today marks Cycle Day 3 which has already achieved positive Cycle targets. If the bulls continue their torrid buying, penetration and conversion of 1840.25 high increases probabilities of an accelerated move to 1846 – 50 zone. Failure to convert recent high, calls for pullback to retest 1830 32 zone..Any deeper pullback below this zone targets the 3D CPZ between 1826 – 29 zone. Current momentum suggests higher likelihood of 1850’s being within reach, but as we know markets can reverse at anytime, so we remain disciplined with our trading.
“Anything Can Happen..We Trade the Probabilities”
I am at peace with uncertainty. I know there is no such thing as a sure thing. I have no particular need to be right. I understand that being perfect has no place in trading. I am flexible. I am willing to change my mind. I am alert to scenario changes. I accept the information that tells me I am on the right track or on the wrong track.