Mutual Fund Monday held equities from further deterioration in prior trade session as price rallied the distance of an Average Daily Range (16.50 handles). Key Resistance is located between 2084.25 – 2085.75. The larger picture continues to paint continued distribution as price is currently below the trailing Three-Day Central Pivot Zone.(3D CPZ) As long as price remains below this dynamic zone this down-leg in price action is more likely to continue.

In early morning trade price is currently trading lower by 18 handles as of this writing (7:30) trading below PDL (2066.00). This violation increases odds of further weakness and potential for additional long-liquidation. Buyers will need to respond aggressively to stem further damage in price.

Today is Cycle Day 2 (CD2)…Odds of Rally > 10 =  83%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible High =2093.00; Possible Low =  2048.75

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

Today’s Hypotheses:

Scenario 1: Price will need to recover from early losses and regain above PDL (2066.00). IF price can clear and convert this level, THEN odds (60%) favor a retracement rally back to 2076 Central Pivot Zone. Above this zone targets 2084.25 – 2085.75 zone.

Scenario 2: Price has violated the PDL (2066.00) in overnight trade. This increases odds (68%) of additional selling into the pit session. Failure to recover back above prior low targets 2062.50 TargetMaster Breakdown Level. Below this level are multiple layers of potential support to be mindful of…They are: 2060 – 2058 zone; 2055 – 2052.50 zone; Extreme Stat-X Level 2048.75.

Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.

Stay Focused…Non-Biased…Disciplined  ALWAYS USE STOPS!

Good Trading…David

Habitude Seven
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.