Consolidating at Highs

Price consolidated throughout Friday’s Session as the aggressive buyers decided to take a break and catch their breath as we highlighted in prior DTS Report. This current “Power Cycle” that has driven S&P Index up 100+ handles in 10 days is not going to be reversed quickly. Though there may certainly be days where price pullbacks to probe for renewed buyers, the momentum is certainly favoring the Bulls. We maintain our posture to stay aligned with dominant forces as this keeps probabilities of profiting consistent.

Monday begins a new cycle which typically results in price probing lower for a new or in the case of the current power cycle, a “renewed” secure low from which to stage the next up auction cycle. The prior Cycle Day 1 CD1 was relatively shallow, which actually was a very strong bullish signal of continuation of upside momentum. As we have said, we would not be surprised and actually welcome some additional back n fill price action, so look for some early weakness to probe lower, but don’t get to bearish on any pullback. Market forces are eyeing S&P 2000 in their sight-finders.

Average Range on CD1 = 18.75; Max Range on CD1 = 22.00; Odds of a Decline > 10 = 70%; Odds of a Decline > 20 = 40%; Average Decline = 13.00 which targets 1978 handle on any pullback.

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

Today’s Hypotheses:

Scenario 1: Friday’s consolidation continues to have bullish dynamics…IF price can penetrate and convert Prior Day High (1991.25), THEN there is a 55% chance of reaching STATX Zone between 1993.25 – 1994.50, with layered levels 1996.75 – 1997.25 up to Xtreme 1999.50 – 2001.00 TargetMaster Level.

Scenario 2: Failure to convert Prior Day High (1991.25) suggests additional consolidation is necessary to absorb recent price gains. There are multiple layers of potential support on pullbacks…Three-Day Central Pivot Zone (3DCPZ) between 1980 – 1982.50 should provide a good long-side buy response. Average Decline on CD1 targets price zone 1975.50 – 1978 50.

Trade Strategy: Continue to look for buying the dip opportunities from Key Decision Points (DP’s) highlighted in the above scenarios…Remain flexible…As price continues to back n fill , there will be ample opportunities both Long and Short to satisfy all traders.

Focus on the Process…Take The Trade…ALWAYS USE STOPS!

Good Trading…David

Habitude Three
I am willing to accept loss. Losing is an integral part of the process. I know and accept that individual losses and losing periods will happen. They are endemic to trading. I do not like loss. I do not expect loss. I simply accept loss as a cost of doing business.


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