Trade Strategy 09.22.14

S&P achieved Xtreme Cycle Price Targets (2014.50) early in Friday’s Session …We’ll mark this level as post Fed Day High and Key Decision Point Pivot. Trader’s sold contracts throughout the Pit Session closing price in the lower quartile of daily range. This weakness has continued into Monday’s Globex Session pushing price down to key Fed Day Closing Range near 1993 handle. The Fed Day trading range is an important marker for traders and investors…Any future violation of that day’s range could setup conditions for correction. Market Internals have continued to deteriorate during last week’s run-up, as the NYSE Average Stock, as well as Small and Mid Caps continue to be laggards. One bright spot is Financials (XLF)…With the prospects of rising interest rates, investors are beginning to rotate some money into this group…This phenomena warrants close attention.

Today is Cycle Day 3 (CD3)…Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range = 17.75; Max Range = 21.25

***Note: The odds highlighted are NOT predictions, rather a guide based upon historical observed occurrences.

Today’s Hypotheses:

Scenario 1: Cycle Targets have already been achieved, so profit-taking can begin to occur anytime….Bulls will need to hold Key Decision Point Pivot (DPP) 1993.00 on a closing basis…IF price can hold above this level, THEN there is a 40% chance price converting 1998.00…IF 1998.00 is converted, THEN price targets 2002 – 06 zone.

Scenario 2: Initial resistance is marked at 1998 handle…Failure to convert this level suggests further selling which began in Friday’s session. Minor support is overnight VTMP (1996), Key Support is 1991.75 (ONL)…Any violation and conversion of this level targets 1989.25 – 1987.75 zone.

Trade Strategy: Our tactical trade strategy will remain flexible to two-sided trade action given price is now between key upside and downside markers…We anticipate that buyers and sellers will continue to be responsive at DPP’s highlighted above, so we’ll take our intra-day trade cues from their activity. As always, we maintain our discipline to trade aligned with dominant force and execute our trade setups consistently.

Focus on the Trading Process…Not the Outcome   ALWAYS USE STOPS!

Good Trading…David

Habitude Nine
I will identify my mistakes and learn from them. I am optimistic, realistic and honest. I will not make up stories about the good or bad things that occurred in the past or are happening now. I admit when something is not working. My optimism gives me faith and courage. I will not fall prey to blame and fear.



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