Fed Chairwoman Janet Yellen Q&A session yesterday proved to be that catalyst that sparked a strong short-covering rally. There were no “gaffes” that marked here first press conference in March. Her single most important statement was in response to question regarding stock market valuations: “We think stocks are not overvalued, or are within the Fed’s fair value based on earnings…” That statement caused a short-covering rally into the close. The time-tested adage: Don’t Fight The Fed continues to apply!

Overnight trade is relatively light within a narrow consolidation band (1948 – 51)…Following a strong price move such as yesterday, some consolidation would be expected. Options expire tomorrow, so there may be some influence with price action…but we will trade the numbers.

Scenario 1: IF price continues its upward trek above 1950.25, THEN expansion price targets 1953.25 – 1956.25…followed by 1957.25 – 1059.25 extreme zone.

Scenario 2: Failure to expand above PDH suggests consolidation…Key pullback zones to be watchful for are 1944 – 46 …1939.75 – 1943.25.

Trade Strategy: We’ll focus on buying pullbacks to key reference zones stated above as we’ll anticipate two-sided trade to digest recent price gains.

Stay Focused…ALWAYS USE STOPS!

Good Trading…David

Habitude Five
I think in terms of probabilities. I do not know, all I have are probabilities. Probabilities are at the core of my decisions. Through consistent application of the probabilities, I will win.

PAST PERFORMANCE IS BOT INDICATIVE OF FUTURE RESULTS