Yesterday’s weakness has follow-through in the Globex Session pushing price down into “deep extreme” territory outlined in prior trade strategy scenario 2: “Extreme downside projections measure 1956.50 – 1954.50, with deep extreme at 1952.75.”

Based upon a violation of Cycle Day 1 (CD1) Low (1956.50), odds favor price reaching lower extreme of 1947.50. If reached, expectation is for a strong buy response as bulls will continue to buy deep pullbacks.

Today’s hypotheses:

Scenario 1: Price having reached deep downside extreme at 1947.75, there is a high probability of a strong buy response which should push price back to CD1 low (1956.50). IF price can convert this level, THEN upside initial upside objective 1963.00 handle, followed by 1966 – 68 zone.

Scenario 2: Since price is currently below CD1 Low (1956.50), Failure to convert this level puts momentum squarely on side of sellers…Potential test of Overnight Low (1947.75) would be anticipated to check for a secure low…Any violation of ONL would potentially usher in some long liquidation with downside projections ranging from 1945 – 1953 zone down to deep STATX Zone Xtreme 1936.50 – 1938.

Trade Strategy: We will look to play long-side if on any retest of ONL holds and price displays valid intra-day bullish shift. Any failure to convert upside Decision Point (DP) and we’ll take the short-side trade. Remain flexible and follow the trade rules…ALWAYS USE STOPS!

***Note: Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range on CD 2 = 14.50

Good Trading…David

Habitude Ten
I know anything can happen, and I can handle anything that does happen. I am open minded. My thoughts and perceptions are clear. I know what to look for. I have rehearsed everything. I adapt to change. I will listen to my indicators and the patterns that emerge. I will adjust and not demand that things continue as they first started.

 

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS