Quad Witching Expiration

Yesterday’s DTS played out nicely, albeit at a snails pace, as price failed to expand above the Open Range Rotation (ORR) Average setting up our Open Range Strategy (short-play), which pushed price down to expected support level 1944 (LOD). Once price stabilized and retested support setup a long trade from 1945.50 which rotated back up two-handles for target. Finally later in afternoon a text-book Bull Stacker Setup developed off 1948 achieving another two-handle rotation target…So although price action seemed to creep ever so slowly along (summertime trade), it was a decent session. We need to remain focused and patient during this current low volatility summertime trade…Though there is very little momentum, price structure (support/resistance) is solidly intact.

Today is Quad Witching as options contracts expire, which may provide some additional crosscurrents early, otherwise expectation is for typical summer Friday trade. It’s forecasted to be beautiful weather this weekend, so traders are heading out to the Hampton’s early. OK..so now we know why the markets are trading so slowly…”It’s the Weather!”

Overnight trade is relatively quiet with 108K contracts traded within prior sessions range. Let’s develop a couple trade scenarios for today’s trade:

Scenario 1: IF price can penetrate PDH (1952.25) and convert, THEN upside price targets 1954.50 – 1956.25…Above this zone measures 1958.25 – 1960.00, with extreme at 1962 – 63.

Scenario 2: Failure to convert PDH, suggests continued consolidation within prior sessions range. Violation below 1944.00 targets 1938 – 40 3-Day Central Pivot Zone (3DCPZ).

Trade Strategy: Expectation is for continued back n fill 2-side trade within recent range and as such we’ll be looking to buy pullbacks to lower range edge and fade upper edge…avoiding the middle “chop-zone”. Specific price points will be highlighted in live trading room.

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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