Tuesday’s Daily Trade Strategy Briefing 03.03.15 outlined the potential for a “stop-run” if 2100 level was violated. “Violation and conversion of 2100 might create a stop-run, but a move below 2079 will reverse the immediate uptrend.” That’s exactly what happened as aggressive selling from the opening tick overwhelmed buyers and drove price down to nail the sell-stops. With a shallow bounce during the overnight trade and subsequent trade near low this morning increases odds of deeper corrective price action
Today begins 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 = 2126.50 based upon penetration and conversion of PDH (2114.75); Possible Low = 2084.25 based upon downside range expansion.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Trade Hypotheses:
Scenario 1: IF price can recapture and convert 2106 – 2108 zone, THEN odds (45%) favor testing PDH (2114.75)…Should this level be converted, odds increase (68%) of expanding range up to 2123 handle. Extreme upside price target for today is 2126.50.
Scenario 2: Odds (71%) favor a decline > 10 handles based upon Cycle Day 1 historical observations. IF price remains below 2106 handle and subsequent violation and conversion of PDL 2095.50, THEN odds (55%) favor lower probe to 2093.25…Failure to find buyers in sufficient size to absorb selling then targets 2089 down to 2084.26 extreme price target.
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 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.