Currently the widest Range for S&P (ES) is between 2120 – 2040…Last weeks down thrust was on reduced selling pressure, compressing the recent range to now between 2120 – 2060. This shortening of the down thrust sets up a “springboard” type pattern which suggests an upside penetration of highs is more probable as long as 2060 handle is not violated.
The bullish arguments says the market has been undergoing absorption since April 15 and it was resolved by Thursday’s spring of the April 17 low. As usual, the deciding factor will be the extent of upward follow through. This week is options expiration week, so anything is possible.
Today is Cycle Day 1 (CD1)…Having closed on the highs, bullish momentum make take price higher before any decline begins.
Odds of Decline > 10 = 71%; Odds of decline > 20 = 41%; Average Range = 18.75; Average Decline = 20.50; Possible HOD = 2122.00 based upon average penetration of CD3 high; Possible Low = 2092.00 based upon average decline on CD1.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: June (M) Contract
Scenario 1: IF price can clear and convert PH (2113.50), THEN there is a 55% chance of reaching 2117 – 2120 STATX Zone…Above this zone is 2122 penetration target, then 2124…TargetMaster Range Breakout Target 2131.00 level.
Scenario 2: Failure to convert PH (2113.50) suggests at minimum a shallow pullback, since bullish momentum remains intact. Should a deeper decline unfold on CD1, then downside price levels to be mindful of are 2107.75 – 2098.75 Central Pivot Zone…2096…Average Decline observed on CD1 measures 2092.00, potential LOD.
Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.
Stay Focused…Non-Biased…Disciplined ALWAYS USE STOPS!
Good Trading…David
“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee