Trade Strategy 10.16.15


World shares are heading higher, extending a rally that’s added $4.1T to global equities this month, following a slew of weak economic reports that have dashed expectations for a Fed rate hike in 2015. European stocks are up, and U.S. futures are edging to the green, adding to the gains in Asia which saw equities close at two-month highs. Another round of corporate earnings is still ahead and traders are awaiting figures on U.S. industrial production, which has shown a slowdown in manufacturing output since late last year.

Today’s Economic Calendar

9:15 Industrial Production
10:00 Job Openings and Labor Turnover Survey
10:00 Reuters/UofM Consumer Sentiment
10:00 Atlanta Fed’s Business Inflation Expectations
4:00 PM Treasury International Capital

PTG Trading

We stated in prior DTS Briefing 10.15.15 “Today is Cycle Day 3 (CD3)…NORMAL SPILL UP…Odds are favorable (83%) rally back above CD1 Low (1993.25) to fulfill Positive 3 Day Cycle“…We also highlighted that Bulls need to hold 1989.75 SPOT to stem any further selling assault. The Bulls not only held key support, they pushed through key resistance (1999.50) and kicked off an explosive rally lead by Financials (GS, JPM, BAC) to achieve and surpass 3 Day Cycle Target (2019.50).

Today is Cycle Day 1 (CD1)….NORMAL SPILL DOWN…Odds of Decline > 10 = 72%; Odds of Decline > 20 = 42%; Average Range = 18.75; Max Average Range = 22.50; Possible HOD = 2028.50 CD1 Penetration Level; Possible LOD = 2000.00 3D CPZ.

***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: Having closed at HOD (2019.50), any residual bullish momentum above this level has potential to carry higher to reach 2025 – 2029 STATX Zone.

Scenario 2: Having reached prior cycle target (2019.50), failure to exceed PH (2019.50) suggests prior rally needs some rest to consolidate gains. Odds (72%) favor at least a 10 handle decline from prior high, so we will be anticipating some “back n fill” type trade. Levels to be mindful of for renewed buy response are: 2013.25 – 2012.50 zone. followed by 2008.00 SPOT.

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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