Trade Strategy 08.17.15


Today’s Economic Calendar

8:30 Empire State Mfg Survey
10:00 NAHB Housing Market Index
10:00 E-Commerce Retail Sales
4:00 PM Treasury International Capital


Last Friday’s trade action was NORMAL SPILL DOWN for Cycle Day 1 (CD1) as price successfully tested prior low near 2074 handle to begin this Cycle’s Rally, which currently targets 2096.00 SPOT. Last cycle’s target (2093.00) is still the hurdle for Bulls to convert for higher prices.

Trading Range…Mid-August Summer…Vacations…Back to School…Options Expiration…Take your pick for which you believe has most influential impact on price, as any or all would be valid reason for “going nowhere fast”. Traders and Portfolio Managers will be scarce next two weeks making for “thin to win” scenarios day-to-day.

Today is Cycle Day 2 (CD2)…Part of this Cycle’s Rally is in place, which could make for confused session…NORMAL SPILL UP to reach Cycle Target (2096.00) is what the Bulls will be looking for…Back in Fill lower for Bears to 2071.50 KEY SPOT.

Odds of Rally > 10 = 83%; Odds of Rally > 20 = 44%; Average Range = 14.50. Max Average Range = 21.50; Possible HOD = 2096.00 based upon average cycle rally; Possible LOD = 2071.50 based upon average cycle decline.

***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, THEN upside measures 2096.00 Cycle Target…Strength above this level opens door for 2102.50 – 2103.50 CD2 Penetration Target Zone.

Scenario 2: Failure to convert 2093.00 keeps price range bound as CD2 many times acts as a consolidation period. Pullbacks within range notes multiple levels for buy response…2074.75…2082.00…2079.50…2075.50. You may note that some of these levels have repeated multiple times past several weeks…Indicating the current trading range price has been confined.

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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