Trade Strategy 01.07.15

WOW!  What a trade session on Tuesday…Can someone spell “long liquidation”? With the continued weakness in the oil patch, commodity funds have been forced into margin selling, which has simply spilled over into equities…Yesterday’s Daily Trade Strategy 01.06.15 nailed both high and low projected extremes for the session. Here are short excerpts: “IF price can hold above PDL (2009.50) and stabilize above 2012 on any pullback, THEN odds (55%) favor a retracement move up to 2022 handle…”…and…”Extreme lower target down to 1986 should the 2000 handle not hold support.”

Overnight trade has price up approximately 17 handles back to Cycle Day 1 Low (2009.50)…Odds today (85%) favor a retracement bounce back to and above 2009.50.

Today is Cycle Day 3 (CD3)…Odds of a 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range on CD3 = 17.75; Max Average Range =21.50; Possible High = 2031.25 based upon clearing and converting prior day high; Possible Low = 1973.75 based upon violation of prior day low.

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

Today’s Hypotheses:

Scenario 1: Odds (85%) favor a strong retracement rally back to and above Cycle Day 1 Low (2009.50)…This level may act as some initial resistance…IF price can convert this level, THEN odds (53%) favor reaching 2012 – 2016 zone, followed by TargetMaster Breakout Range Level 2019.50.

Scenario 2: Price has rallied back to CD1 Low (2009.50) in pre-market action as odds favor returning back to this level. IF price cannot successfully convert this level, THEN odds (45%) favor a move back lower to test 1998 handle. Should any retest fail to find responsive buyers, then test of prior low (1984.25) may unfold.

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.

Leave a Reply