Trade Strategy 07.30.15


U.S. economic growth likely rebounded in the second quarter as healthy consumer spending and residential investment offset the drag from trade and the energy sector. Experts estimate that after a contraction in the first three months of the year, the economy grew at an annual rate of 2.9% last quarter. The Commerce Department will publish the initial GDP figure at 8:30 a.m. ET

The decision to keep rates near zero for at least a few more weeks was unanimous in the FOMC’s statement yesterday. Policymakers continued to see an improving economy and labor situation, but questions remain as to when the first rate hike will occur. Will it finally happen at a September meeting, later this year or in 2016?


S&P e-mini continued its rally in prior session extending upwards to exceed penetration target, courtesy of the Fed’s unanimous decision to keep rates near zero for at least a few more weeks.

Today is Cycle Day 2 (CD2)…Bullish momentum remains intact, though a decline to absorb recent gains can unfold if no further upside progress…Overnight trade has price trading quietly within narrow range with no additional upside expansion.

Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45% Average Range = 14.50; Max Average Range = 21.50; Possible HOD = 2106.75 Average Cycle Rally Target; Possible LOD = 2082.75 Max Avg Range.

***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 can clear and convert PH (2104.25), THEN upside targets 2106 – 2108.75 zone…Above this zone measures KEY SPOTS 2112.00…2115 handles.

Scenario 2: Failure to convert PH (2104.25) and subsequent violation of 2093 handle raises odds (66%) of decline initially targeting 2088 – 2086 zone…Below this zone measures 2081.25 – 2079.00 3 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

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