Yesterday completed the 3-Day Bullish Cycle in style having hit perfectly the CD3 average range target of 17.75 handles. (1923.25 low + 17.75 avg = 1941.00 high). Subsequent pullback found solid support at the Volume-Trend MidPoint (VTMP) at 1932.00. Residual bullish momentum carried through in overnight trade to 1938.75 as price continues to hold recent “relief rally” gains. Tuesday begins a new Cycle, so it’ll be important for bulls to continue to hold onto this price action…

Average Range on CD1 = 18.75; Max Range on CD1 = 22.00; Odds of a decline > 10 = 70%; Odds of a decline > 20 = 41%; Average Decline on CD1 = 12.50

***Note: The odds highlighted are not predictions, rather a guide based upon historical observed occurrences.

Today’s hypotheses:

Scenario 1: Prior Day High (1941.00)…IF residual bullish momentum continues and converts PDH, there is a 60% chance of reaching 1948.25 – 1949.50 zone based upon penetration of CD3 high.

Scenario 2: There is potential significant overhead resistance between 1941 – 1943.50 STATX Zone…Failure to convert this zone suggests a pullback is necessary to find renewed buying interest…Initial support is PDMP (1932.00)…Violation and conversion of this level targets 1927.75 – 1928.50 average decline. Failure of this zone to find responsive buyers suggests sellers have regained control which would target PDH (1923.25).

Trade Strategy: Today is Cycle Day 1 (CD1), and as such we would be expecting a probe lower for a higher secure low level from which to stage the next auction rally. We will be looking to trade either side today from key Decision Points (DP)…Failure to rise above 1938.75 (ONL) would offer short trade…Successful test of PDMP (1932.00) would trade long-side. If price pulls back deeper to initial target  zone of 1927.50 – 1928.50, we would anticipate greater responsive buying to establish long-side of trade.

Lots going on today, so Remain Flexible…Follow the Trade Rules…ALWAYS USE STOPS!

Good Trading…David

Habitude Six
I am at peace with uncertainty. I know there is no such thing as a sure thing. I have no particular need to be right. I understand that being perfect has no place in trading. I am flexible. I am willing to change my mind. I am alert to scenario changes. I accept the information that tells me I am on the right track or on the wrong track.

 

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURES RESULTS