Trade Strategy 12.1.14

Narrow price range and relatively light volume characterized last week’s holiday trade action…Though it was quite, things were indeed happening under the surface…Exploring a bit deeper into the volume figures, what appears is buyers encountered responsive selling in sufficient quantity as to repel price from making any further upside progress for the week. This potentially is a subtle bearish signal should this action be confirmed with lower prices this week. Crude Oil got hammered last week as OPEC agreed to keep output unchanged, potentially crippling US Shale Drilling companies should the price of oil remain depressed for an extended period. It’s important to note here that Energy Sector represents 11% capitalization weighting within the S&P 500 index…

Today is Cycle Day 2 (CD2)..The current cycle is a bit disrupted with the holiday last week, but normally readjusts quickly…Avergae Range on CD2 = 14.50; Max Range = 22.25; Possible High = 2085.00 Possible Low = 2052.

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

Today’s Hypotheses:

Scenario 1: IF price clears and converts PDH (2073.25), THEN there is a 65% chance of price reaching 2080.25 – 2083.50.

Scenario 2: Price is currently below key support level 2064 that held firm last week…Violation and conversion of this level shifts the dynamics to bear-mode. IF price fails to recapture 2064, THEN additional selling may develop. Initial support is 2052 handle…Should this level fail to find responsive buying, then further downside levels to be mindful of are: 2048 – 2046 zone, 2042.00, with 2038 – 2034 being significant High Volume Zone.


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 of 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

Habitude Five
I think in terms of probabilities. I do not know, all I have are probabilities. Probabilities are at the core of my decisions. Through consistent application of the probabilities, I will win.


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