Trade Strategy 10.09.14

How do you spell volatility? The 5 Day Average Daily Range (ADR 5) now has expanded to 25.75 handles…The ADR 10 measures 23.50 handles. Price traded at both ends of range extremes in yesterday’s session as the October 2nd excess low of 1918 held firm creating a double-bottom. The afternoon short-cover rally of +40 handles was courtesy of the FED Minutes release. Welcome to October!

Mr. Market pulled off yet another positive three-day rally having closed above the 1950 handle level. Price is currently near upper range extremes as a New Cycle begins today.

Today is Cycle Day 1 (CD1); Odd of Decline > 10 = 70%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Range = 21.75; Possible High = 1969.75 based upon penetration of CD3 high; Possible Low and Price Target = 1942.50 – 1944.75 based upon Average Decline observed on CD1.

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

Today’s Trade Hypotheses:

Scenario 1: IF price penetrates and converts PDH (1964.00), THEN there is a 45% chance of price reaching 1968.50 – 1972.50 zone. Above this zone measures 1971.00 – 1976.50 STATX Zone, with TargetMaster Range Breakout Level 1984.75.

Scenario 2: Failure to convert PDH (1964.00), THEN expectation is for pullback in price given the meteoric rise in price during prior session. Levels to be mindful of for possible support are: 1953.50 – 1951.00 zone; 1947-1948 3D CPZ; and Average Range Price Target between 1942.50 – 1944.75 zone. TargetMaster Range Breakdown Level (1938.25).

Trade Strategy: With intra-day volatility on the rise with swings of increased magnitude in either direction, our main trade strategy will be to remain open and flexible to two-side trade, both long/short from key Decision Point Pivots (DPP). 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

Habitude Ten
I know anything can happen, and I can handle anything that does happen. I am open minded. My thoughts and perceptions are clear. I know what to look for. I have rehearsed everything. I adapt to change. I will listen to my indicators and the patterns that emerge. I will adjust and not demand that things continue as they first started.



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