Trade Strategy 07.29.15


All eyes on Wall Street will be on the Federal Reserve’s policy statement today, as investors comb through clues to determine when a rate liftoff will begin and how aggressive the tightening cycle will be. Although the announcement is expected to point to a growing U.S. economy and stronger job market, a slew of fresh employment, inflation and GDP reports are still on the schedule before the Fed’s highly anticipated September meeting. Today’s statement will take place at 2:00 p.m. ET.


Early bullish gap faded quickly yesterday as sellers took advantage of higher prices, only to see price fade back down to fill gap. Bulls were only too eager to buy up all contracts and absorb the selling. Once the last seller had sold, buyers aggressively bid price higher throughout the session ultimately reaching CD3 Penetration Target 2088.50.

In overnight trade price has extended slightly beyond PH (2089.00) closing on on Cycle Target 2093.50. Bulls have regained the “Ball” regardless of “Deflategate”…Hard or Soft…Bulls have control heading into FED DAY.

Today begins new Cycle Day 1 (CD1)…Odds of Decline > 10 = 72%; Odds of Decline > 20 = 41%; Average Range = 18.75, Max Average Range = 22.00; Possible HOD = 2099.25 based upon penetration of CD3 high; Possible LOD = 2079.25 based upon average range on CD1; Average Cycle Decline Target 2066.00.

***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 holds above PH (2089.00), THEN initial upside projects 2093.50 (prior cycle target) up to 2096.75 STATX Zone…Penetration and HOD Target marked at 2099.25.

Scenario 2: Failure to hold bid above PH (2089.00) and subsequent violation of ONL (2084.50) sets stage for pullback in price to consolidate yesterday’s gains. Key support zone marked between 2079.75 – 2075.50. Average Cycle Decline Target = 2066.00.

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

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