Trade Strategy 08.04.15


Today’s Economic Calender
8:30 Gallup US ECI
8:55 Redbook Chain Store Sales
10:00 Factory Orders

Oil futures have regained some strength, as investors returned to the market to seek cheap valuations after prices plunged in the previous session. Weighed down by a continuing worldwide glut and uncertainty over economic growth, WTI prices sank 4% to five-month lows on Monday, while Brent crude finished below $50/bbl. Both Brent crude and WTI are now trading up 1.7% at $50.22/bbl and $45.94/bbl, respectively


In classic form Cycle Day 1 (CD1) gave the market the decline expected and then some, as price reached projected Average Cycle Range Decline Target of 2088.50, overshot and hit 2084.00 CD1 Violation Target. Market on Close Buy Imbalance of $600M gave the fuel to rally sharply into the cash close and back to Volume Trend Mid-Point at 2090 handle.

In overnight trade 2091.00 handle has capped any further gains, so we will mark the 2091.50 SPOT as “Key Resistance” to begin today’s Session. We’ll also mark 2083.50 SPOT as “Key Support” on any retest of prior low.

Today is Cycle Day 2 (CD2); Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD = 2105.50; Possible LOD = 2075.50.

***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 2091.50 SPOT, THEN initial upside targets 2095.50 SPOT, followed by 2096.50 – 2097.50 3D CPZ.

Scenario 2: Failure to convert 2091.50 SPOT and subsequent violation of 2086.50, opens door for retest of CD1 Low (2080.00)…Violation and conversion of this level targets 2077.25 – 2075.50 TargetMaster STATX 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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