Weakness in Crude Oil early in yesterday’s session spilled over to equities as price sold down hard in opening rotation trade, to reach our projected price target of 2021 handle. The remainder of the session can be characterized as selling absorption, stabilizing price with a “neutral volume profile”.
Today is Cycle Day 1 (CD1)…Expectation on CD1 is to probe for a new “secure cycle low”…Prior days low (2015.25) will now be marked as this secure low, as overnight trade retested the key 2021 handle and has rallied 15 handles to 2035.
Odds of Decline > 10 = 70%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Average Range = 21.75; Possible High = 2058.25 based upon penetration and conversion of CD3 high; Possible Low = 2004.75 based upon violation of CD3 low.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Scenario 1: Having tested the key 2021 handle in overnight trade, we will mark this level as “key low” for day session. IF price can hold above 2026 on pullbacks, THEN there is a 55% chance of reaching 2037.75 – 2039.25 3D CPZ. Above this level targets 2045.50 2049.50 STATX Zone.
Scenario 2: IF price violates 2021 handle, THEN odds (55%) favor a retest of PDL (2015.25). Violation of this level projects 2012.50 – 2008.50 STATX Zone, with Xtreme Low measuring 2008.25 – 2004.75.
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!
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.