Trade Strategy 01.21.15

Failure to hold gap higher during the Open Range resulted in aggressive selling with enough momentum to reach our lower price target of 1998.00 outlined in prior Daily Trade Strategy Briefing 01.20.15With sellers flushed out at lows, bulls regained control reversing price to settle price in the upper quartile of days range.

Today is Cycle Day 1 (CD 1)…We normally would be anticipating some price weakness as traders probe for a new “secure low”. Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Average Range = 22.00; Possible High = 2035 based upon average penetration of CD3 high; Possible Low = 1988 based upon average 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: Price will need to find responsive buyers in sufficient quantity on any pullback in price…Initial support test will be within the 3D CPZ (2006 – 2010)…Average Decline of 22.50 handles observed on CD1 targets 2004.00 for potential support. IF price can hold pullback, THEN clearing and converting 2013.00 targets 2019.25, then 2026.50.

Scenario 2: Expectation is for price weakness on CD1…Average Decline = 22.50…This targets a potential pullback low of 2004, measured from PDH (2026.50). Failure to find responsive buyers on pullbacks targets 1999.00 – 1995.50 STATX Zone. Violation of PDL (1997.50) would force long liquidation targeting TargetMaster Breakdown Level 1988.50.

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 on 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.


Leave a Reply