Trade Strategy 07.28.15


The Federal Reserve begins a two-day policy meeting later in the day, as officials from the central bank continue their long, slow march toward raising interest rates. Investors are not expecting any major decisions this week, but they will be looking for hints on the Fed’s timing for possible future movements. While consensus for a rate rise is leaning towards September, a growing number of market watchers are suggesting two rate increases may be in the cards this year. U.S. futures: Dow +0.5%. S&P +0.6%. Nasdaq +0.5%


Price continued their slide yesterday reaching CD2 Violation Target 2058.5 before stabilizing, potentially securing this cycle’s low. In overnight trade S&P e-mini (ES) has bounced back approximately 10 handles off low to 2076.50. The objective today for the bulls is to continue this rally and recapture 2079.75 CD1 Low which would qualify as positive 3 Day Cycle. Formidable resistance between 2082 – 86 is also an important hurdle to overcome…Average Cycle Target measures 2093.50.

Today is Cycle Day 3 (CD3)…Average Range = 17.75; Max Average Range = 21.50; Possible HOD = 2093.50; Possible LOD = 2045.25.

***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: Price has rallied approximately 10 handles of prior low (2056.50) and is currently above Central Pivot Zone (2065.75 – 2068.75). IF price can maintain bid above this zone and subsequently clear and convert CD1 Low (2079.75), THEN upside objective is 2083.00 – 2086.00 3D CPZ. Further price strength beyond this zone measures 2088.50 – 2093.50.

Scenario 2: Failure to clear and convert PH (2080.75) suggests buyers are worn down…Subsequent violation of 2068.75 – 2065.75 zone potentially forces additional selling targeting PL (2056.50)…Should this level break, downside target measures 2052.50 followed by deep extreme 2045.25 CD3 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!

Good Trading…David

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


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