Trade Strategy 10.17.14

S&P e-mini is higher by approximately 24 handles (7:30 am) in pre-pit session trade. This “bounce” is +3% off the low of minus 10 percent which we had opined in previous report could find some stabilization. Backing n filling with potential of retesting the low would be the normal process in the coming days…But for now, enjoy the upside trade action.

Today is Cycle Day 1 (CD1) Odds of Decline > 10 = 70%; Odds of Decline > 20 = 41%; Average Range = 18.75; Max Range = 22.25; Possible High = 1878.50 based upon clearing and converting CD3 High; Possible Low = 1808 based upon violation of CD3 Low.

***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 PDH (1869.75) is cleared and converted, THEN there is a 72% chance of 1878.50 projected high being achieved.

Scenario 2: Violation of PDL (1822.75), THEN there is a 41% chance of 1808 handle being achieved.

Trade Strategy: Price has held firm in overnight trade and has already in pre-pit session trade achieved projected upper target of 1878.50…This takes away some potential trade for those during regular trading hours. It’s also option expiration, so with recent volatility and expiring option contracts, we’ll continue to be disciplined seeking out Bull/Bear Stacker and Premium and Discount TradeSetups. Early bias will be to the buyside on this relief rally, but will maintain a flexible two-side trade posture to take advantage of short-side should it develop.

Stay Focused…Non-Biased…Disciplined   ALWAYS USE STOPS!

Good Trading…David

Habitude Four
I am at ease with controlled risk. I will risk and I will win. I am courageous. I will take a chance. I manage risk to my comfort level. Risk keeps me on my toes, keeps me alert and at the top of my game.



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