Trade Strategy 10.23.14

Yesterday was Cycle Day 1 (CD1) and played out perfectly….Failure to push new highs resulted in a “failed-auction” reversing price to probe for a “secure low”. We opined in the live trading room that expectation was for 1920 – 22 zone (VTMP) to become support with renewed buy response. The actual LOD (1920.25) which has held in overnight trade…Price has rallied in early morning trade back to 1938 essentially erasing prior days loss.

Today is Cycle Day 2 (CD2): Expectation is for continued two-sided trade consolidation with a bullish-bias as long as prior day low holds. Odds of rally > 10 = 83%; Odds of Rally > 20 = 44%; Average Range on CD2 = 14.50; Max Range = 22.50; Possible High = 1940 – 42 zone  based upon average cycle rally; Expansion High = 1950 – 52 based upon clearing and converting CD1 high. Possible Low = 1901.50 – 1902.50 based upon violation of CD1 low.

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

Today’s Hypotheses:

Scenario 1: IF PDH (1943.75) is cleared and converted, THEN there is a 60% chance of price extending to 1950.00 – 1952, with TargetMaster Range Breakout Target 1955.25.

Scenario 2: Failure to convert PDH (1943.75), suggests additional consolidation is necessary to work off selling pressure. Support levels to be mindful of on pullbacks are…1929.50 – 1932 zone…1926 – 28…then prior day low at 1920.25. Violation of low  calls for deeper correction targeting 19 11 – 1915 3DCPZ.

Trade Strategy: The Bull is currently in control, so we’ll defer to long-side trade opportunities on pullbacks to key Decision Point Pivots (DPP) until there is a definitive shift in underlying sentiment. Continue to focus of 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

Habitude Eight
I can recover from any setback. I have an attitude of abundance. I affirm abundance in the universe. I know I cannot begin to count the stars. I realize the ocean doesn’t care whether I go to it with a bucket or a teaspoon. I know the market provides a river of opportunities. I invest in my capabilities. I will be happy with my results.



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