A Bulls Bull Market

This current “power cycle” qualifies for a “Bulls Bull Market”…Price strength with shallow pullbacks to prior breakout levels that hold strong. The longer higher prices get absorbed the more underlying strength builds for next assault higher. It would take a significant change in sentiment to derail current bullish momentum

Monday’s CD1 never produced the anticipated probe for low..to the contrary…buying immediately from the opening bell, followed buy midday consolidation into settlement. Volumes are sub-par as expected during a big vacation period for money managers ahead of the long Labor Day weekend.

Today is Cycle Day 2 (CD2) which could end up being a choppy session with a continued upside bias to push S&P e-mini above the 2000 psychological level. Average Range on CD2 = 14.50; Max Range on CD2 = 22.25; Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%

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

Today’s hypotheses:

Scenario 1: Prior Day High (1999.75) IF this level is penetrated and converted, THEN there is a 60% chance of price reaching 2003.50 TargetMaster Level. Further upside targets based upon Average Cycle Rally  are 2005.50 – 2007.50 zone, with Xtremes measuring 2011 – 2012.25.

Scenario 2: Failure to convert PDH (1999.75) suggests continued consolidation within recent ranges. Pullback levels to be mindful of for renewed buy response are 1992.25…1989.00 – 1990.50 3DCPZ, then lower TargetMaster Level at 1986.00.

Trade Strategy: Path of least resistance remains up as bullish momentum is firmly in place. As such, we will continue to tread lightly on the long-side during the low volume, pre-holiday trade sessions. This does not preclude us from shorting on auction failures from key upper levels…Just be aware that going against momentum in low volume trade is greater risk.

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

Good Trading…David

Habitude Four
I am at ease with controlled risk. I will risk and I will win. I am courageous. I will take a chance. I manage risk to my comfort level. Risk keeps me on my toes, keeps me alert and at the top of my game.




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