Yesterday was Cycle Day 1 (CD1) as price probed lower to our anticipated support zone between 1986 – 88…The actual LOD was 1987.50. The current Cycle Price Targets range between 2001.25 – 2004.50 based upon historical observed cycle average expansion ranges.
In overnight trade price is currently trading 2002.00 which is exactly the distance of an average historical range observed on cycle Day 2 (CD2). Current price momentum has enough energy to push higher to reach cycle penetration expansion levels before the long Labor Day holiday weekend.
Average Range on CD2 = 14.50; Max Range = 22.25; Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Cycle Price Target Projects 2009.75 based upon historical 3-Day Average Cycle Rally.
***Note: The odds highlighted are not predictions, rather a guide based upon historical observed occurrences.
Scenario 1: IF price penetrates and converts PDH (1997.25) THEN odds (57%) favor push higher to reach initial STATX Zone between 2001.25 – 2003.00. Above this zone are layered expansion levels: 2004.50…2005.75…2007.00 (Breakout Target)…Xtreme Zone 2009.75 – 2010.75.
Scenario 2: Failure to hold penetration of PDH (1997.25) targets lower support zones for renewed buy response…1996.00 – 1997.25 3DCPZ…1994.25 – 1991.50.
Trade Strategy: As the month of August (end of summer) comes to a conclusion, we continue to favor the Bullish Case, as simply there has been no signs of a top developing and pullbacks continue to offer solid buying opportunities. Our intra-day tactical trade strategy remains solidly in alignment with dominant force (Bull) on pullbacks to Key Decision Points (DP’s). This does not preclude us from taking short-side trades prudently, but the long-side has been simply most profitable.
Remain Focused…Take The Trade…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.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS