Trade Strategy 10.22.14

Solid “relief rally” drove market prices higher in excess of 50 handles as fears of an Ebola pandemic, worsening economy and just about any other investor concern has subsided. Price achieved TargetMaster Range Breakout Level of 1937.50 into the closing bell, a full 51.75 handles from the low tick of day.

Today begins a new cycle (CD1)…Having closed on the high end on range, momentum may push prices a bit higher before any aggressive selling develops. Odds of Decline > 10 = 70%; Odds of Decline > 20 = 41%; Average Range on CD1 = 18.75; Max Range = 22.00; Possible High = 1945.72 based upon clearing and converting CD3 high; Possible Low = 1916.50 based upon average decline.

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

Today’s Hypotheses:

Scenario 1: IF PDH (1938.75) is cleared and converted, THEN there is a 45% chance of price extending up initially to 1945.50 – 1947.50 zone with STATX Zone 1946.60 – 1954.75; TargetMaster Range Breakout Level is 1976.00.

Scenario 2: Failure to convert PDH (1938.75) suggests consolidation is anticipated…Minor support is 1930.25, followed by 1921.50…Average decline measures 1916.50, with additional layered levels between 1908 – 1912. TargetMaster Range Breakdown Level = 1900.50.

Trade Strategy: Bulls have regained control with a strong 3-Day Bullish Cycle…We will continue to remain aligned with dominant force, currently bull, on pullbacks to key Decision Point Pivots. Price having reached and exceeded cycle targets may need to consolidate recent gains, so anticipating some back n fill price action would be normal, so we’ll remain open to trade opportunities on either side of trade ledger. 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 Seven
I take the long term view. I am willing to lose in the short term. I understand that losses are a necessary cost of doing business, like inventory to a merchant. Drawdowns are viewed as temporary. I realize that my wins and winning periods are part of the broad process. Each trade is but one in a string of trades. What is happening now is one piece of a much larger puzzle. Because of this I do not get overly euphoric or despondent.



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