Trade Strategy 11.26.14

In yesterday’s trade we knew there was good odds, 71% of a decline greater than 10 handles occurring on Cycle Day 1 (CD1)…The high of session came early at 2073.00…then the decline began pushing price down to 2062.75…10.25 handles..BINGO! Odds of Decline (71%) > 10 handles fulfilled. We also knew that 2064 has been an important support level, so we expected a buy response if tested…Subsequent rally higher places a “secure low” marked at 2064 handle.

Anticipated trade activity today is for light volumes ahead of the Thanksgiving Holiday…Friday will be half-day session, so we will take that opportunity to rest, relax and recharge our trading batteries.

Today in Cycle Day 2 (CD2)…Typically this day is a consolidation type day within the three-day cycle…The Holiday may disrupt the normal cyclic action, so don’t read too much into this weeks trade action.

Here’s an abbreviated trade view: Key Support: 2064…Key Resistance 2073…Clearing and conversion of 2073 targets 2083 level…Violation and conversion of 2064 targets 2053 level. Expectation is for continued quiet pre-holiday trade between recent zone parameters.

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!

Good Trading…David

Habitude Eight
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.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.25.14

Price of S&P e-mini traded in a very narrow 4 handle range in prior session, influenced by Thanksgiving Holiday week…typically volumes contract significantly, so no real surprise. Nasdaq (NQ) and Russell (TF) were the out-performers on a relative basis…We should be expecting more of the same in terms of volume contraction the remainder of this week…Friday will be half-day trading, so we will take that opportunity to enjoy the day-off.

Today begins a new Cycle Day 1 (CD1)…Typically we would be anticipating some price weakness as exploration for new “secure low”…Holiday trade action may disrupt the normal cyclic patterns this week, but this is usually just temporary…Don’t read too much into trade action unfolding this week.

Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Range = 21.75; Possible High = 2075 – 2077 zone based upon clearing and converting CD3 high; Possible Low = 2054 – 2050 based upon average decline combined with violation of CD3 low.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: Residual bullish momentum could continue today…IF so, THEN clearing and converting PDH (2069.00) places odds at 55% for price reaching higher to 2070.50 – 2072.00 zone, followed by 2075.00.

Scenario 2: Low volumes and day type could restrict any significant upside, so failure to successfully convert PDH (2069.00) places higher odds (71%) of decline greater than 10 handles…Keep in mind that holiday could skew either of these scenarios…Violation of 2064 would place trade dominance back into Bear Camp. Levels to be mindful of on pullbacks are: 2066 – 64 zone (CPZ); 2061.75 – 2060.75 STATX Zone; 2059.25 – 2056.75 (3D CPZ).

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!

Good Trading…David

Habitude Seven
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

Trade Strategy 11.24.14

As the Thanksgiving Holiday week begins, let us all take time-out to reflect on how fortunate we are and express our deep gratitude for life.

POBC joined in the “money easing game” by lowering interest rates to spark economic growth…So now  the ECB, BOJ, POBC and US have and continue to awash “cheap money” throughout the World. Though that may seem like a boon for financial markets, it also underpins the deep economic problems around the Globe.

Today is Cycle Day 3 (CD3), as we stated on Friday, price has exceeded all cycle targets…Price is free to flow both upside or downside to probe for secure high and low levels. With the shortened holiday week, volumes will become lighter as traders/investors will take additional time-off…so price movement could become choppy…”Thin To Win”

Possible High for CD3 = 2082, based upon conversion of CD2 high (2072.25); Possible Low = 2054, based upon average range observed on CD3; Average Range = 17.75; Max Range = 21.25 TargetMaster Range Parameters = 2075.25 – 2049.25.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: IF PDH (2072.25) is cleared and converted, THEN there is a 50% chance of price reaching 2075.25, followed by 2080 – 2082 expansion zone.

Scenario 2: Failure to convert PDH (2072.25), suggests back n fill consolidation of recent price gains. Initial Resistance is marked at 2068…Initial Support marked at 2058.00…Beyond these levels and price could expand range in either direction…Today’s Central Pivot (CPZ) = 2061 handle…Three-Day Central Pivot Zone (3DCPZ) = 2052.25 – 2049.75.

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!

Good Trading…David

Habitude Six
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.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.21.14

S&P e-mini has vaulted to the upside in overnight trade, currently plus 14.50 handles, exceeding all Cycle Targets and Range Parameters!

We are not going to post the typical price targets usually displayed daily, since all have been exceeded and it would just be rhetorical to do so. The next Xtreme Zone is between the 2069 – 2075 STATX Zone. Exercise extreme caution in today trading and continue to follow our strict trading discipline…

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!

Good Trading…David

Habitude Five
I think in terms of probabilities. I do not know, all I have are probabilities. Probabilities are at the core of my decisions. Through consistent application of the probabilities, I will win.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURES RESULTS

Trade Strategy 11.20.14

Early weakness in S&P e-mini found responsive buyers within the Three-Day Central Pivot Zone (3D CPZ) as laid out in yesterday’s DTS: Trade Strategy 11.19.14. Failure to expand the range to upside shows internal price weakness in the short-term…hence, expectation is for some price weakness today as a new cycle begins.

Today is Cycle Day 1 (CD1)…Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Range = 21.75; Possible High = 2059 based upon conversion of CD3 hih; Possible Low = 2028.00 based upon average decline observed on CD1; TargetMaster Range Parameters = 2055.25 – 2038.25.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: IF price clears and converts PDH (2050.50), THEN upside measures 2053.00 up to 2057 with upside extreme at 2059.00.

Scenario 2: Since today begins a new cycle (CD1), trade expectation favors the sell side probe for a new secure cycle low. Buyers have indeed been responsive to recent selling, but have appeared to become less and less aggressive…So the potential for more downside has increased if buyers decide they have enough contracts. Levels to be mindful of on downside are: 2036 – 38 zone…layered levels between 2036 – 2031.50…STATX Zone between 2028.75 – 2024.25.

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!

Good Trading…David

Habitude Four
I am at ease with controlled risk. I will risk and I will win. I am courageous. I will take a chance. I manage risk to my comfort level. Risk keeps me on my toes, keeps me alert and at the top of my game.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.19.14

S&P broke out of recent trading range propelling price upwards to our Cycle Expansion Targets outlined in yesterday’s DTS: Trade Strategy 11.18.14 Slight pullback in overnight price allowing for digestion of recent gains. Having reached and exceeded cycle expansion targets, expectation will be for some two-sided trade during today’s session.

Today is Cycle Day 3 (CD3)…Price has exceeded all cycle targets…so the following “odds of 3D rally” is more rhetorical since they have already occurred.

Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range on CD3 = 17.75; Max Range = 21.25; Possible High = 2063.75 based upon converting CD2 high; Possible Low = 2036.25 based upon average range on CD3. TargetMaster Range Parameters = 2059.00 – 2038.50.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: Having reach and exceeded cycle targets, price would need to clear and convert PDH (1954.00) to continue expanding range…IF this occurs, THEN additonal upside measures 2055.25 – 2057.25 STATX Zone; 2059.00 TM Range Breakout Level; then deep penetration zone between 2061.75 – 2063.75.

Scenario 2: Failure to expansion beyond PDH (2054.00), expectation will be for more two-sided trade action to absorb recent breakout…Initial support zone between 2045.00 – 2047 will be first test for responsive buying…Violation of this zone would suggest deeper pullback down to 3D CPZ 2040.50 – 2038.00.

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!

Good Trading…David

Habitude Three
I am willing to accept loss. Losing is an integral part of the process. I know and accept that individual losses and losing periods will happen. They are endemic to trading. I do not like loss. I do not expect loss. I simply accept loss as a cost of doing business.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.18.14

Early weakness in prior session probed lower to find a probable “secure low” at 2025.25 level on Cycle Day 1 (CD1). Price held bid throughout the day holding above its Open Range and VolumeTrend/Midpoint (VTMP). Price remains congested in a narrow, tightly wound range, with the potential of breaking out to higher ground…

Today is Cycle Day 2 (CD2)…Odds of Rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range on CD2 = 14.50; Max Range = 22.50. Possible High = 2050 based upon clearing and converting PDH (2040.50); Possible Low = 2025.25 based upon failure to expand range. TargetMaster Range Parameters = 2048.00 – 2030.50.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: IF price clears and converts PDH (2040.50), THEN there is a 70% chance of price achieving 2044.50 – 2045.25 zone, followed by Range expansion targets between 2047.50 – 2048.75…2050.00.

Scenario 2: Failure to expand range keeps price contained within recent multi-day range…Levels to be mindful of on any pullback are: 2034.75 – 2036.25 3DCPZ; TargetMaster Range Breakdown Level 2030.50 and STATX Zone between 2025.50 – 2027.50.

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!

Good Trading…David

Habitude Two
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.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.17.14

Having made a new all-time high at 2043.75 last week, price has struggled to get back above 2038.50 on a closing basis, so this level will now be “key marker’ to penetrate and convert for high prices.

Today is Cycle Day 1 (CD1) and begins a new probe for a secure low. Overnight action has already pushed price lower to initial cycle range target of 2025.50…We will mark this level as important low from which to base long trades until it is violated and converted.

Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Range = 22.00;  Possible High Zone = 2046.75 = 2048.25 based upon converting CD3 high; Possible Low = 2025.50 based upon average decline on CD1. TargetMaster Range Parameters: 2047.25 – 2030.00.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: IF price clears and converts PDH ( 2039.75), THEN there is a 50% chance of reaching 2041.75, then continued strength targets 2044.25, 2046.75 through 2049.50 STATX Zone.

Scenario 2: Failure to convert PDH (2039.75) suggests additional back n fill price action within current multi-day trading range. Support zone between 2025 – 2030 become critical for the bulls to continue to respond should additional selling develop. Violation of ONL (2025.25) targets 2021.50, followed by 2018.50 – 2017.75 zone.

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!

Good Trading…David

Habitude One
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.

 

Trade Strategy 11.14.14

Yesterday’s Daily Trade Strategy 11.13.14 placed odds at 57% of reaching TargetMaster Breakout Level 1 (2041.25) if Cycle Day 1 high was cleared and converted. Early strength pushed price up to anticipated target zone before “topping-out”…which was followed by aggressive initiative selling driving price all the way back down to Key Decision Point Zone between 2026 – 28 where responsive buyers reacted to support price.

Today is Cycle Day 3 (CD3)…There is room for further price strength although yesterday’s aggressive selling after reaching initial targets may cap recent price high…Price is currently above CD1 low (2026.75) and will need to stay above today to qualify as bullish 3-Day Cycle. Any violation and conversion of 2026.75 could result in some long liquidation.

Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range on CD3 = 17.75; Max Range = 21.50; Possible High = 2053.50 based upon converting CD2 high; Possible Low = 2023.75 based upon Range Parameters.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: Price would need to clear and convert PDH (2043.75) for any additional range expansion…IF so, THEN targets measure 2051.50 – 2053.25.

Scenario 2: Failure to expand prior days range keeps price confined within 20 handle 3-Day Range between 2042.50 – 2022.50. Any penetration or violation of these levels will expand recent range…Expectation will be for price action for today is containment within these parameters.

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!

Good Trading…David

Habitude Twelve
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.

 

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Trade Strategy 11.13.14

Today’s DTS will be an abbreviated version as I am traveling Thursday and will be absent from Trading Room.

Bullish Structure remains solidly intact as price probed down to anticipated support 2026 – 2028 zone…See Wednesday’s DTS: Trade Strategy 11.12.14  The current cycle rally began, and is anticipated to reach Cycle Target zone between 2044.25 – 2047.25.

Thursday is Cycle Day 2 (CD2)…Odds of rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range on CD2 = 14.50; Max Range = 22.50; Possible High = 2047.25 based upon converting CD1 high; Possible Low = 2025.25 based upon Range Parameters.

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: IF price clears and converts PDH (2037.25), there is a 57% chance of reaching 2041.25 Breakout Level 1, followed by 2044.25 – 2047.25 Range Cycle Projections.

Scenario 2: Failure to expand range suggests additional period of price consolidation…Level to be mindful of are 2033.75 – 2031.75 3D CPZ…Cycle Day 1 Low 2026.75…TargetMaster Range Breakdown Target 2025.25.

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!

Good Trading…David

Habitude Eleven
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.

 

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS