Last week’s trade saw increased volatility with the Algorithm’s whipping around price in each direction causing increased “trader anxiety”. Though the bigger picture remains bullish, there definitely seems to be a Change of Character (COC) to a more “risk-off” posture. Hedge Funds gave been underperforming the broader market this year, so perhaps a bit of “come from behind” trade is taking place, which has increased the daily price swings…We know one thing for sure…volatility is now on the rise. As traders, we need to have greater focus on our trading discipline, attentiveness and focus on the very best trade opportunities with highest probabilities.

Today is Cycle Day 2 (CD2): Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range on CD2 = 14.50; Max Range = 22.25

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

Today’s Hypotheses:

Scenario 1: Price settled in the upper quartile of days range with Prior Day High (1979.25). IF price can penetrate and convert this level, THEN there is a 65% chance of reaching 1981.50 – 1984 STATX Zone, followed by 1985 – 1988.25 Zone, based upon conversion of PDH.

Scenario 2: Failure to convert PDH (1979.25) suggests some back n fill price action to absorb Friday’s late day short cover rally to find “real buy response”. Levels of interest on pullback are: 1956.50 – 1958.75 STATX Zone and TargetMaster Breakdown Level. IF this zone is violated and converted, THEN further liquidation may unfold which targets 1947 – 1945 zone, followed by deep STATX Zone 1931- 1933.25.

Trade Strategy: With the increased volatility we remain steadfast in following our trade rules for setups. The Bull/Bear Stacker Setups have been working with a higher degree of accuracy, as they are designed to position early in a developing directional move. Remain open and flexible to all trade opportunities. Very Important to “check your biases at the door“…Trade the setups…not opinions.

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

Good Trading…David

Habitude Two
I am detached from the results. I think in terms of the process and the validity of the process. I understand that I am more than the trading. I do not tie a fragile ego to any day’s trading results. I have faith that over time I will make money. The results of any one trade are statistically unimportant. I think in term of probability. A single trade says nothing about me as a person.

 

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURES RESULTS