Friday’s late day sell-down into settlement (1990.75) may have been some final capitulation of longs, capping off a week of steady selling. From high to low measures approximately -4.08% covering 84.50 handles. Most if not all Market Internal Metrics are currently in deep statistically oversold condition, which sets up a higher probability reversion bounce.
Today is Cycle Day 3 (CD3) and there are very good odds of for a positive session. Odds of a Rally > 10 = 82%; Odds of a Rally > 20 = 53%; Possible High = 2033.50; Possible Low = 1975.50. Average Range on CD3 = 17.75; Max Average Range = 21.25.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses:
Scenario 1: There are good odds (82%) of a rally > 10 handles today…Overnight trade has been primarily buyside with price +11.50 handles…Today’s bullish objective is to recapture CD1 low (2017.00), which would validate this cycle as bullish…Price will need to hold any retracement of early gains above 1994 – 96 zone. Upside targets 2008…2014.25 – 2017.00. IF price can convert CD1 Low (2017.00), THEN additional upside targets 2020.50 – 2025.25 3D CPZ.
Scenario 2: Should price give back all it’s early gains, a violation of 1994 targets a retest of Friday’s settlement (1990.75)…Violation and conversion below settlement targets 1984.75 – 1900.50 zone with deep extremes between 1979.25 – 1975.50.
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 Three
I am willing to accept loss. Losing is an integral part of the process. I know and accept that individual losses and losing periods will happen. They are endemic to trading. I do not like loss. I do not expect loss. I simply accept loss as a cost of doing business.