Trade Strategy 01.29.15

Failure of S&P e-mini (ES) to clear and convert the Open Range Midpoint (2036.00) was an early “tell” that Selling was the dominant force underpinning market dynamics. Federal Reserve FOMC comments only added fuel to a smoldering tinder-box. Violation of intra-day pivot support (2018) was the final spark that forced selling the remainder of the session, closing on the lows.

Today begins a new Cycle Day 1 (CD1)…Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%, Average Range on CD1 = 18.75; Max Average Range = 22.00; Possible High = 2018.00; Possible Low = 1980.

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

Today’s Hypotheses:

Scenario 1: Price is currently higher in pre-session trade by 10 handles…Prior Day Low (1991.25) will need to hold on any test during the day-session. IF buyers return in sufficient quantity and aggressiveness, THEN there is a 65% chance of price retracing back to 2010 – 2012 zone…Further strength above this zone targets 2018 – 2021.50 TargetMaster Range Level.

Scenario 2: Should selling continue in day-session and violate and convert PDL (1991.25), then expectation is for long liquidation. Lower price targets on a break lower measure 1982.50 – 1980.25 zone…down to 1975.00 STATX Zone. Deep Range Xtreme measures down to 1965.50 TargetMaster Breakown Level.

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 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.


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