Trade Strategy 08.05.15


Today’s Economic Calender
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 International Trade
8:30 Gallup U.S. Job Creation Index
8:30 Treasury Refunding Quarterly Announcement
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories

Global bond yields are on the rise after Atlanta Fed President Dennis Lockhart said it would take “significant deterioration” in the U.S. economy for him to not support a rate hike in September. Lockhart’s opinion is especially notable as he’s considered a centrist on the FOMC whose views typically mirror the consensus. Tracking similar movement in U.S. treasuries, German 10-year yields +3 bps to 0.66%, rebounding from a two-month low hit on Tuesday. The dollar index is also getting a boost, up 0.2% to 98.23 – its highest since April 23.


In prior DTS Report 08.04.15 we stated: “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.”

Price held within the upper and lower “SPOTS” highlighted above as price consolidated, thus working to build energy for next move. There is still room for price to rally higher and reach Average Cycle Target of 2102.50, but in order to increase probabilities of this occurring, conversion of 2093.00 SPOT is required.

Today is Cycle Day 3 (CD3)…Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 54%; Average Range = 17.75; Max Average Range = 21.50; Possible HOD = 2104.50 based upon penetration of CD2 high; Possible LOD = 2069.50 based upon violation od CD2 low.

***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 Converts 2093.00 SPOT, THEN odds (74%) favor initially pushing higher to 2095.50 SPOT…Conversion then targets 2098.00…2102.50.

Scenario 2: Failure to convert PH (2096.25) and subsequent violation and conversion of 2088.00 SPOT opens door for further decline, initially targeting 2083.50 SPOT…Below this level downside expansion to 2080.00 (CD1 Low). Violation of this level targets 2077.75 – 2075.50…down to 2069.50 TargetMaster Breakdown Level.

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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