Trade Strategy 07.13.15


The eurozone and Greece have agreed in principle to a third bailout that will keep the beleaguered country in the currency area, for now, after almost total capitulation from Prime Minister Alexis Tsipras. Greece will have to put €50B of state assets in a trust fund so that they can be sold off and the proceeds used to repay debt. The government will also have to get further austerity measures through parliament, a tough ask given the “no” vote in the recent referendum. “We’ve been ‘Greeced’ by our own government!”


Price rallied throughout Friday’s Session settling near high of day (2074.75). Pullback in price overnight to “key support marker” (2053.50) has held and rallied sharply following announcement of GREK / Euro Deal.

Today is Cycle Day 1 (CD1)…The normally expected decline on CD1 occurred early in overnight session down to “key support marker” 2053.50. Rallying from support, price has reached CD1 Penetration Target 2083.50. Price will need to hold gains during the Cash Session to validate the strength of this move…Initial test will be on pullback to prior high (2074.75). Key Support is now raised to 2063.25 Central Pivot.

Odds of Decline > 10 = 72%; Odds of Decline > 20 = 41%; Average Range = 18.75; Max Average Range = 22.00; Possible HOD = 2083.50 based upon penetration of CD3 high; Possible LOD = 2052.75 based upon max average range decline.

***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: September (U) Contract

*****The levels outlined below are more general framework within a larger range…They are to be used are reference prices from which to consider trade opportunities, not hard trade levels.

Scenario 1: Expected decline on CD1 has occurred during overnight trade…Subsequent rally has now reached upper penetration target of 2083.50…Price will now need to hold PH (2074.75) on any pullback during Cash Session to valid this bullish up wave. Converting 2083.50 may place increased pressure on existing shorts, possibly forcing a squeeze…There is plenty of space above to drive higher if this scenario unfolds.

Scenario 2: Failure to convert 2083.50 and subsequent violation of PH (2074.75) calls into question the validity and staying power of the overnight rally. Key Support Zone between 2066.75 – 2063.25 will be significant test if touched…Expectation is for buy response. Violation of this zone targets 2056 – 2052.00 Three Day Central Pivot 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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