As America celebrated it’s birth this past weekend all across this great Country, investors/traders are partying like it’s 1999…at least those in the Hamptons. From reports I have received, with new highs in the indexes, the financial crisis is a distant fading memory, courtesy of the Fed’s injection (financial crack) into the system, even as 92 million remain jobless.

Weekend review of key sector performance and standings, Consumer Discretionary and Technology assume leadership roles…Inflation remains contained…Economic Indicators support the Long-Term Uptrend in Stocks…Heck, what’s not to party about? With indexes at all-time highs, “complacency” seems to have settled-in…bears have thrown in the towel. Perhaps now is a good time to be concerned…We’ll continue to trade the numbers…not our opinions!

In previous DTS we has stated in Scenario 1 that if price penetrated 2-day high, there was a 65% chance of hitting 1978.50 upside price target…Pre-holiday trade did just that, and price has since backed off that level. So, this level (1978.50) becomes “Key Resistance Marker”.

Let’s get to today’s hypotheses:

Scenario 1:  IF the 7/3 High (1978.25) can be penetrated and converted, THEN there is a 70% chance of reaching initial target between 1980.25 – 1983 zone.

Scenario 2: Failure to attractive new buying above 1978.25 (Key Resistance) suggests the need to auction prices lower to find renewed buyers. Key levels to watch will be 1970 – 72 zone, followed by 1966 – 68 with 1964 level as “Key Support Marker”. Any break below this level we’ll update live in trading room.

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

Good Trading…David

Habitude Four I am at ease with controlled risk. I will risk and I will win. I am courageous. I will take a chance. I manage risk to my comfort level. Risk keeps me on my toes, keeps me alert and at the top of my game.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS