Trade Strategy 09.30.15


Global equities were higher at the time of writing and were set to end what’s been a brutal three months on a positive note. Many major markets have suffered their worst quarter for a number of years amid fears about China’s economy and the endless speculation about when the Fed will finally raise interest rates, and almost $11T has been wiped off the value of global shares. Emerging-market currencies have been hit particularly hard.

Today’s Economic Calendar

7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
9:45 Chicago PMI
10:30 EIA Petroleum Inventories
2:00 PM Janet Yellen speech

PTG Trading

Late day margin selling pushed indexes to lows of session yesterday creating “double-bottom” formation. With a failed 3 Day Rally in prior Cycle, this is now setup for strong rally during new Cycle beginning today.

Today is Cycle Day 1 (CD1)…NORMAL SPILL DOWN…Secure low was found at 1861 double-bottom low yesterday…This sets up price for powerful rally which can occur on CD1…In overnight trade price has rallied 29 handles to reach CD1 Penetration Target 1898.50.

Odds of Decline > 10 = 72%; Odds of Decline > 20 = 42%; Average Range = 18.75; Max Average Range = 22.50; Possible HOD = 1898.50 (CD1 Penetration Level); Possible LOD = 1850 (Average Cycle Range 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: December (Z) 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: Price has rallied 29 handles in overnight trade reaching 1898.50 CD1 Penetration Target. Most upside objectives have been met, so any pullback during cash session will need to illicit responsive buyers…Additional upside targets to consider are 1901.75, then 1908.50 – 1910 Average Cycle Rally Target.

Scenario 2: Violation and conversion of 1890.00 SPOT opens door for deeper downside. Levels to be mindful of are: 1883.50, 1878.50, 1873.50 SPOTS.

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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