Early weakness in S&P e-mini (ES) pushed price right down into our anticipated support zone between 1976 – 1974 (actual LOD 1073.75) outlined in Monday’s DTS 02.02.15. Following a mid-day pullback into newly formed dynamic support (1990), price vaulted higher into the closing bell settling just off the high of day (2018.50).
Today begins a new cycle…Cycle Day 1 (CD1)…Typically we would be anticipating weakness, but with yesterday’s late day buying surge, price may have enough bullish momentum to continue higher before a decline begins. Below are the numbers for CD1.
Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 18.75; Max Average Range = 22.00; Possible High = 2027 based upon average penetration of CD3 high; Possible Low = 1963 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.
Scenario 1: Bullish momentum is is place with late day upside surge…IF price can continue to rally above PDH (2018.50), THEN there is a 45% chance of extending to reached 2027 target. Above this level measures 2030.25…2036.50…then 2047 TargetMaster Range Breakout.
Scenario 2: Should continued momentum fail to materialize, then potential for pullback in price to find renewed buy response would be anticipated. Levels to be mindful of on any pullback are: 2012 – 2014…then 2004 – 2006. Significant support zone between 1992 – 1996.
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!
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.