Trade Strategy 08.28.15


After some of the most turbulent market days in recent memory, the weekend can’t come soon enough for many investors. Panicked selling on Monday and Tuesday gave way to a rush to buy on Wednesday and Thursday. However, there could be a sting in the tail for Friday – U.S. stock futures are signaling all three main indexes will open about 0.7% lower and European markets were weaker in morning trade.

Today’s Economic Calendar

Jackson Hole Symposium
8:30 Personal Income and Outlays
10:00 Reuters/UofM Consumer Sentiment


Relief Rally continued higher in Thursday’s Session reaching and slightly exceeding 3 Day Cycle Target 1982.00. Sharp but brief sell off during the afternoon caught traders off-guard as some anal-ist (analyst) warned of a “violent sell off”. Where the hell has he been this past week? Perhaps in the Hampton’s or Figi Islands…Either way, investors/traders have lost all respect for analyst’s predictions…Only the Algo’s seem to pay attention…Their binary minds will eventually develop and figure it out that it’s all “fugazzi”.

Overnight trade is rather docile…perhaps traders are “Fed-up” and have left early for the Hampton’s? Your’s truly will also be cutting-out early on this Friday, fortunately I will not be rubbing elbows with Hampton-ites. Just some well needed R&R after a wild trading week. Us mere mortals need to re-energize…Let the Algo’s keep on going…and going…and going just like the EverReady Bunny.

Today is Cycle Day 2 (CD2)…Expectation is for some “back n fill” (whatever that means now) following wild week of trade. The “normal numbers” are outlined below:

Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD = 2002.00; Possible LOD = 1925.00.

***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 holds above 1960, THEN initial upside targets 1971, followed by 1982. Strength above this level targets 2002 Cycle Penetration Level.

Scenario 2: Violation and conversion of 1960 opens door for lower probe targeting 1943 – 1940  STATX Zone…Below this zone is 1925 3D Pivot.

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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