Trade Strategy 09.03.15


Traders will be listening to announcements from the European Central Bank today, as President Mario Draghi and the governing council gather in Frankfurt to set monetary policy and discuss the state of Europe’s economy. Economists expect the inflation forecast to be lowered and for ECB staff to cut their growth outlook amid emerging market concerns and upward pressure on the euro. Draghi is also likely to repeat earlier statements that the central bank is ready to deploy further stimulus measures if needed. Euro flat at $1.1223.

Today’s Economic Calendar

Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Gallup US Payroll to Population
8:30 Initial Jobless Claims
8:30 International Trade
9:45 PMI Services Index
9:45 Bloomberg Consumer Comfort Index
10:00 ISM Non-Manufacturing Index
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet


Prior trading session played out as scripted “SPILL NEUTRAL/UP” for Cycle Day 2. Scenario 1 was the dominant theme as price tested and held 1919.50, then converted 1931 SPOT with late session rally. In overnight trade price is slightly higher and within a whisker (4 tics) of yesterday’s target 1959.50…Pre-Cash high 1958.50 within Margin of Error (MOE).

Today is Cycle Day 3 (CD3)…NORMAL SPILL UP…Residual bullish momentum may continue early in session as bulls try to force some short covering. Upside targets have also been fulfilled for this Cycle as price is currently at 1956.25 upside Penetration Target.

Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 54%; Average Range = 17.75; Max Average Range = 21.75; Possible HOD = 1956.25 (Cycle Penetration Target); Possible LOD = 1932.50 (Key Over/Under).

***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 PH (1948.25) THEN initial upside targets 1956.25 – 1960.50 STATX Zone. Strength above this zone measures 1975.50 SPOT.

Scenario 2: Price is currently above PH (1948.25)…Violation and conversion of this level would be sign “tell” that buyers have run out of fuel to push higher. Subsequent break below 1942 handle opens door for a deeper pullback targeting 1934.75 – 1932.50 zone.

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


*****This trade strategy report is disseminated for “education only” and should not be viewed in any way as a recommendation to buy or sell futures products.”



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