Catching Breath after 100 Handle Move

S&P notched a new contract high and reached current cycle targets laid out in yesterday’s DTS report. In overnight trade price stalled at high and violated initial support pivot at 1989. Price has traded lower to test 1st line of Key Support between 1983 – 1984 zone. Following +100 handle move in the index, it’s not surprising that buyers take a break to catch their breadth.

Today is Cycle Day 3 (CD3) and having already hit minimum cycle targets, price is anticipated to enter a period of “back n fill” consolidation. Bulls remain squarely in charge, though more two-sided balance trade may begin to develop.

Average Range on CD3 = 17.75; Max Range on CD3 = 21.25; Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 54% Projected High Zone on CD3 = 1997.50 – 2000.25 based upon penetration and conversion of CD2 High (1992).

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

Today’s Hypotheses:

Scenario 1: Having reached initial cycle targets, some back n fill price consolidation is welcome to absorb recent gains. To maintain the bullish tone, pullback to 1983 – 84 zone will be viewed  as opportunity to buy the pullback. IF price can hold above key levels and convert prior day high, THEN there is a 65% chance of reaching STATX Zone 1992.87 – 1994.50. Above this zone projects multiple levels between 1997.50 – 2001.00

Scenario 2: Failure to exceed prior day high suggests some consolidation necessary to absorb recent gains. Initial Key Support 1983 – 84 zone. Strong support is the 3D CPZ between 1980.00 – 1982.50.

Trade Strategy: Our tactical trade strategy today would be look for more two-sided trade developing as price consolidates recent gains with a bullish skew. We will be open to trade selection both long and short from Key Decision Points (DP’s) as outlined above and dynamically created throughout the Session.

Focus on the Trading Process…Take the Trade…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.


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