Trade Strategy 08.21.15


World stocks are heading for their worst week of the year after data showed Chinese factory activity shrinking at the fastest pace since 2009. Marking the fifth straight month of contraction, the flash Caixin/Markit China Manufacturing PMI fell to 47.1 in August, compared to a final reading of 47.8 in July. More than $500B was erased from the S&P 500 yesterday, while the Dow plummeted below 17,000 for the first time since October.

Today’s Economic Calendar

9:45 PMI Manufacturing Index Flash


Yesterday’s sell down was an ABERRANT occurrence to the NORMAL SPILL UP for Cycle Day 2, as concerns of worldwide economic slowdown affected every market sector. Recognition of the early weakness and warning for potential TREND DOWN DAY was broadcast to PTG Members in the Live Trading Room:

[ Thu Aug 20 2015 09:47:46 ] David Dube: ORRMP = 2057.75

[ Thu Aug 20 2015 09:47:52 ] David Dube: Initial Bull/Bear Line

[ Thu Aug 20 2015 09:54:58 ] David Dube: Larger Trend remains DOWN and this is unfolding as TREND DAY DOWN as well.

[ Thu Aug 20 2015 10:07:51 ] David Dube: DO NOT TRY CATCHING FALLING KNIVES

It was again reiterated early afternoon session:

[ Thu Aug 20 2015 13:12:18 ] David Dube: DO NOT TRY CATCHING FALLING KNIVES

[ Thu Aug 20 2015 15:01:00  ] David Dube: Early MOC Indication SELL IMB -543M

The actual MOC Sell Imbalance was $1.8 Billion for Sale as Large Institutions were in liquidation mode all session as price closed on lows.

In overnight trade price has hit 2013.00 CD3 Violation Target with small bounce…

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 = 2051.25; Possible LOD = 2010.00.

***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 hold above 2013 and clear and convert PL 2024.75, THEN odds (82%) favor a rally attempt of greater than 10 handles initially targeting 2034.75…Above this level targets 2042.50 Central Pivot, with projected HOD 2051.25.

Scenario 2: Price closed on lows with additional weakness in overnight session…IF price fails to convert PL (2024.75) THEN Bears remains in control with potential for additional long liquidation. Extreme STATX Low is marked at 2010.00.

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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