Trade Strategy 04.17.15

After successfully testing Cycle Day 1 Low for surety, S&P (ES) rallied throughout the session to test the upper pivot at 2104 handle. Late day rejection with $700M Closing Sell Imbalance continues to hint at distribution by the BIG BOYZ. The past two sessions have seen MOC Sell Imbalances totaling $2.4 Billion…Today is OPEX and early indications suggest a cash open gap down, as price is again testing Cycle Low.

Today is Cycle Day 3 (CD3)…Initial cycle objectives have been met at 2104 handle…Failure to expand beyond this level and rejection has emboldened “Da Bears” to push prices lower in overnight trade. Unless Bulls step in yet again to defend their turf, today could end being another distribution day.

Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range = 17.75; Max Average Range =  21.50; Possible High = 2113 based upon converting CD2 high; Possible Low = 2083.25 based upon max average range on CD3.

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

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Today’s Hypotheses: June (M) Contract

Scenario 1: Price is currently testing Cycle Day 1 Low…IF this level can hold, THEN  odds (45%) favor rally attempt targeting 2094.50 3D CPZ. Above this level price will need to clear and convert 2099.50 to expand higher.

Scenario 2: Price rejection at 2104 handle with large MOC Sell Imbalances has taken its toll on bulls resolve to expand range higher. Overnight decline has pushed price down to Max Average Range (21.50) observed on CD3. This level (2083.25) becomes critical “marker” to hold above during pit session. Violation of this level targets further downside 2078.50 – 2076.25 zone.

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

“Knowing is not enough, We must APPLY. Willing is not enough, We must DO. – Bruce Lee


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