Trade Strategy 09.17.14

Yesterday was Cycle Day 2 (CD2)…Early open gap weakness did not last as price had a strong bid right from the opening print…The key was holding above the Open Range Rotation Midpoint (ORRMP), which triggered our Open Range Strategy Setup. FedSpeak announcement catapulted price to reach Xtreme Cycle Targets highlighted in yesterday’s DTS. You can review here: Trade Strategy 09.16.14.

Today is Fed Day…Policy announcement expected 2:15 ET. Having already reached upper Cycle Targets, residual momentum may take price a bit higher, although some choppy trade may ensue as traders wait for Fed Release.

Today is Cycle Day 3 (CD3)…Cycle Target of 1992.50 – 1993.25 has already been achieved…Odds of 3D Rally > 10 = 82%; Odds of 3D Rally > 20 = 53%; Average Range on CD3 = 17.75; Max Range = 21.25.

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

Today’s Hypotheses:

Scenario 1: Having achieved Cycle Targets in prior session, any residual bull momentum will need to penetrate and convert PDH (1994.50). IF this level is converted, THEN there is a 40% chance of reaching 1997.75 – 2000.50, with 2002.25 – 2004.25 TargetMaster Range Breakout Target.

Scenario 2: Failure to further expand the range above PDH (1994.50) suggests some consolidation of yesterday’s gains…Levels to be mindful of on pullback are: 1988.50 – 1985.50 – 1982.50…3DCPZ (1979.00 – 1981.00)…TargetMaster Range Breakdown Target at 1978.75.

Trade Strategy: We are anticipating more of a choppy range type day ahead of Fed Policy Announcement…We will tread lightly on either side of the trade ledger today from Key Decision Point Pivots (DPP’s). We will actively update Dynamic S&R Zones in the Trading Room.

Stay Disciplined…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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