Trade Strategy 04.20.15

Thursday’s failure to exceed prior high 2104 level created a Double Top formation which ultimately lead to Friday’s deep sell off when 2092 was violated. “Gap n Go” Open Range had lots of bearish energy which forced price to exceed max average range observed on Cycle Day 3 and hit Initial Balance Target 1 at 2065 handle. Price stabilized and rebounded into settlement.

In overnight and pre-cash open trade, price continues to rebound higher approximately 50% of prior decline. Expectation is for a sell response as price nears 2088 – 2092 zone, as that is where price accelerated downward.

Today is Cycle Day 1 (CD1)…Deep sell down on Friday well beyond range extremes has produced a sharp snap back rally. We would continue to anticipate some type of decline during Cash Session once price has peaked early.

Odds of Decline > 10 = 81%; Odds of Decline > 20 = 41%; Average Range = 18.75; Max Average Range = 22.00; Possible High = 2086.50 based upon max average retracement from CD3 low; Possible Low = 2053.50 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.

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Today’s Hypotheses: June (M) Contract

Scenario 1: Price has bounced sharply from deep extremes and has reached the max average range of 22 handles measured from CD3 low. Price will need to hold any pullback to 2078 handle for price to stabilize for bullish case. Significant resistance is anticipated between 2088 – 2092 zone. Should bulls convert this zone, upside target TargetMaster Range Breakout Level 2096.50.

Scenario 2: Having rallied in overnight session to 2088 handle, we will mark this level as “Key Resistance”. Failure to convert this level during cash session calls for pullback to 2078 level (10-Handle Rule). Violation of this level targets deeper pullback to 2075.75, then 2070.75, with 2065.50 TargetMaster Breakdown 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!

Good Trading…David

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

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