Trade Strategy 07.16.15


Market participants are awaiting day two of Fed Chair Janet Yellen’s testimony in Washington, where she will report to the Senate Banking Committee. On Wednesday, Yellen reiterated that interest rates are likely to rise this year and resisted calls for more congressional oversight, as members of the House of Representatives pressed the central bank to be more accountable.


S&P e-Mini continued to display signs of strength as price consolidated at the Average Cycle Target (2103.50). A brief news related report regarding Greek protesters shook out weak longs down to 2095 handle before recovering to close with strong upside momentum. Overnight trade price has rallied an additional 10-handles to reach 2113.50, which is the Penetration Target and potential HOD outlined in prior Daily Trade Strategy 07.15.15.

Today is Cycle Day 1 (CD1)…Having rallied higher to reach Penetration Target, price is now in a position to begin a decline IF 2108 handle is violated and converted. Current trend direction has ample energy to continue higher if the power that be want it so, remained disciplined to staying aligned with dominant forces.

Odds of Decline > 10 = 72%; Odds of Decline > 20 = 41%; Average Range = 18.75. Max Average Range = 22.00; Possible HOD = 2113.50 based upon penetration of CD3 high; Possible LOD = 2091.50 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: IF price clears and convert PH (2107.75), THEN upside projects 2113.50 Penetration Target and potential High of Day.

Scenario 2: Odds (72%) favor a decline on CD1 greater than 10-handles…Price has reached expansion target 2113.50…We would not be surprised if the decline for this cycle begins from this measured level. Violation back downwards of PH (2107.75) would confirm 2113.50 as more important high…Downside projections measure 2104 – 2101.50 Central Pivot Zone. Weakness below this zone targets 2097.50 down to 2091.50 3D CPZ.

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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