Holding New Highs

S&P e-mini continued to consolidate recent gains holding new high territory, albeit on below average volume in addition to declining net cumulative delta readings…Not a strong combination for being at new contract highs…The story continues to unfold…Stay Tuned!

Yesterday was Cycle Day 3, which got an early push-to-fade as we laid out in yesterday’s Trade Strategy…Bulls continued to buy the mid and late day dips. Friday begins a new Cycle, which typically exhibits some weakness, so be on higher alert for deeper pullbacks developing.

Today’s hypotheses:

Scenario 1: IF price can penetrate and convert PDH (1985.75), there is a 60% chance of reaching high target of 1994.00

Scenario 2: Odds favor PDH (1985.75) of being firmly in place with an expectation of lower prices if this level cannot convert…There is an 85% chance of making a low below 1985.75 down to 1973.50 based upon an average decline on Cycle Day 1 of 12.25 handles.

Additional Handicapping: Average Range on Cycle Day 1 = 18.75; Odds of decline > 10 = 70%; Odds of decline > 20 = 41%

Trade Strategy: We are seeing some visual cracks in the bulls armor plating, though not quite easily penetrable…Short-side trade is beginning to have merit on auction failures, but don’t overstay your welcome…Take the 2 pt rotation and say thank you! Remain focused on trading in alignment with dominant force…Be Flexible. ALWAYS USE STOPS!

Good Trading…David

Habitude Six
I am at peace with uncertainty. I know there is no such thing as a sure thing. I have no particular need to be right. I understand that being perfect has no place in trading. I am flexible. I am willing to change my mind. I am alert to scenario changes. I accept the information that tells me I am on the right track or on the wrong track




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