Trade Strategy 08.14.15


Today’s Economic Calendar

8:30 Producer Price Index
9:15 Industrial Production
10:00 Reuters/UofM Consumer Sentiment


S&P e-mini (ES) followed expected script fairly well yesterday as it was NEUTRAL SPILL with consolidation and slight downward lean as prior Cycle Target (2093.00) had been achieved. Today begins a new Cycle and the normal action is DOWN SPILL…Average Cycle Decline Target measures 2071.50 which has been a KEY SPOT for multiple cycles.

Overnight trade has price lower testing CD3 Low (2073.25)…Bulls will need to keep trade above this level for continued stabilization…Bears naturally want to KILL IT and DRILL IT below 2071.50 SPOT. Let’s see how the “Battle of the Bots” plays out on Friday before options expiration.

Cycle Day 1 (CD1)…Odds of Decline > 10 = 72%; Odds of Decline > 20 = 42%; Average Range = 18.75; Max Average Range = 22.00; Possible HOD = 2103.50 based upon penetration of CD3 high; Possible LOD = 2071.50 based upon average decline on CD1.

***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 will need to hold above PL (2073.25) and clear and convert 2079.25 followed by 2083.00 in order to rally back to 2093.00 SPOT.

Scenario 2: Violation and conversion of PL (2073.25) and below 2071.50 SPOT Bears can press price lower targeting 2065.25…2062.75 (CD1 Violation Target) followed by 2058.25 TargetMaster Range 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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