Price of S&P e-mini futures (ES) swung between a high of 2010 and low of 1988 last week creating an increasingly wide trading range. The disparity in trade throughout the week suggests differing viewpoints between traders/investors on accepted value. This is good news for intra-day traders, as with the daily price ranges increasing, this provides greater profit opportunity for nimble traders.
Friday was Cycle Day 1 (CD1), in which probing for a “secure low” was it’s main course of business. That low was found at 1988.25 within STATX Zone early, followed by price rally closing near session high. Average Cycle Rally now measures 19.50 handles.
Today is Cycle Day 2 (CD2) Odds of Rally > 10 = 83%; Odds of Rally > 20 = 44%; Average Range on CD2 = 14.50; Max Range on CD2 = 22.25; Average Cycle Rally = 16.75 – 22.50 handles.
***Note: The odds highlighted are NOT predictions, rather a guide based upon historical observed occurrences.
Today’s Hypotheses:
Scenario 1: Prior Day High 2006.50 falls squarely within this cycle’s Avg Rally Zone between 2005 – 2007.75. IF price can penetrate and convert PDH, THEN upside price targets measure 2010 – 2011 zone. Xtreme cycle targets: 2014.50, 2015.50, followed by TargetMaster Breakout Target 2017.25.
Scenario 2: Price has already achieved initial cycle target zone…Overnight high 2006.75 will be important marker to convert for further upside. Failure to do so suggests the need for back n fill to attract new buying…Having achieved initial cycle targets may make for choppy trade to find firm support. The 3DCPZ (2000.75 – 2001.25) will be first touch for support. Stronger zone (1998 – 2000) Low Volume Node will be of greater buying interest should price probe that zone for response.
Trade Strategy: With increasingly wider price swings developing, our trade posture becomes more flexible to two-sided opportunities. We’ll continue to focus on establishing positions from Key Decision Point Pivots (DPP’s), as well as staying aligned with current swing, utilizing Bull/Bear Stacker Setups and Premium & Discounts.
Remain Flexible and Focused…ALWAYS USE STOPS!
Good Trading…David
Habitude Eleven
I am courageous and I always act, even in the face of uncertainty and possible loss. Do not say, no fear. Feel the fear and act anyway. I may be frightened, but I still saddle up. I am not reckless. I act promptly in accordance with my methodology. I respect my calculations. I have a healthy respect and I balance that respect with my courage. I am an explorer. I am on a hero’s journey.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS