Sellers sprinted out of the gate on the Open Range and never looked back dropping price throughout the session reaching Max Average Range Target of 2098.00. This price action has definitely deflated much of last weeks bullish enthusiasm at contract highs. As stated in prior DTS 05.26.15 “This market compression action is a setup for an explosive directional move…” This places price back deep into lower range of Mid-May…Bulls are on the retreat.
Today is Cycle Day 1 (CD1)…Today’s deep sell-off has exceeded the Average Decline normally seen on Cycle Day 1…2096 – 2098 zone now becomes “Key Support Marker” if any rally attempt is to be staged during this new cycle. Violation and conversion of this zone opens doors for further long liquidation.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: June (M) Contract
Scenario 1: Price bounced off the PL (2096.00) late in prior session to stem further losses. IF price can hold above this level on any retest, THEN clear and convert 2104 – 2106 zone, upside retracement targets 2108.50 – 2110.00 UVA. Price would need to capture 2112.00 to reverse much of prior days damage…Keep in mind that any rally attempt that reaches these levels are anticipated to illicit a stronger “sell response”.
Scenario 2: Violation of 2100.00 LVA on any pullback opens door for retest of PL (2096.00) Violation and conversion of this level increase odds of margin selling / long liquidation. Initial downside price targets 2094.50 – 2091.25 STATX Zone. Below this zone measures 2085.25 CD1 Violation 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!
“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee