Trade Strategy 10.22.15


All eyes will be on ECB President Mario Draghi today amid a policy meeting in Malta that will provide clues about further monetary stimulus. Grounds for extending QE would include deflation risks, slowing growth in China and stock market volatility. On the flip slide, oil prices remain low, which is a boost for energy-importing eurozone countries, and confidence indicators remain solid. Economists widely expect Draghi to keep the door open for more stimulus at the press conference, but see him stopping short of announcing any new policy measures.

Today’s Economic Calendar

8:30 Initial Jobless Claims
8:30 Chicago Fed National Activity Index
9:00 FHFA House Price Index
9:45 Bloomberg Consumer Comfort Index
10:00 Existing Home Sales
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

PTG Trading

Yesterday’s trade was textbook Cycle Day 1 (CD1)…We knew high odds (72%) favored a decline, with Average Cycle Range Decline Target 2009.50 matching 2008.00 SPOT as outlined in Scenario 2 of Daily Trade Strategy 10.21.15. We stated: “Possible LOD = 2009.50 (Average Cycle Range Decline)”  Actual LOD = 2008.00.

Today is Cycle Day 2 (CD2)…NEUTRAL SPILL/UP…Having closed on the lows of the day, momentum may take markets lower before the rally starts.

Odds of Rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD = 2121.25; Possible LOD = 2004.25.

***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: IF price hold above PL (2008.00), THEN odds (84%) favor a relief rally of 10 handles, which would target 2018 SPOT. Should price continue to rally above this level, upside retracement targets 2020.25 – 2022.25 3D CPZ.

Scenario 2: Violation and conversion of PL (2008.00) opens door for continued liquidation pressing lower targeting 2004.25 – 2001.00 STATX Zone. CD2 Violation Level Extreme is 1996.75.

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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