Bulls were able to hang on to the upper part of yesterday’s range into settlement, but not able to advance above the Open Range. This creates a short-term high and displays some underlying weakness…With ADR (10) just 8.25 handles and price at upper edge of extremely stretched Bollinger Bands, there is higher potential now of wider price action. Question remains is this a “short-term high” favoring a deeper pullback/correction, or just another “buy the dip” opportunity for bulls? There is potential for a larger degree “Cycle High” this week, so we could get some clarity and answers to our question soon. STAY VIGILANTE!
Overnight trade is lower as price has pulled back into yesterday’s DTS stated support zone between 1916 – 18…Further price weakness below this zone targets 1913 – 14 (3D CPZ) where there was a strong buy response in Monday’s session. Failure to hold this critical zone will display the first sign of structural price break, which increases odds of deeper pullback with lower price targets measuring 1908 – 10 zone, then 1903 – 05 zone.
Initial upside resistance now becomes 1920 handle…Price would need to penetrate and convert this level for potential higher prices…If this scenario plays out, the PDH (1924.25) remains an important hurdle to overcome.
Our Trade Strategy will favor selling bounces into stated resistance zones as potential for deeper pullback / correction increases in likelihood this week. We of course will always trade from the dominant side of price action regardless of our personal biases, as Mr. Market is always right.
Remain Disciplined….ALWAYS USE STOPS!
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.