Trade Strategy 12.4.14

This Cycle is obviously very strong as price continued to power higher leaving in its wake a higher low on Cycle Day 1 (CD1). We have seen this occur in past cycles, and when it does probabilities favor what we call a “Power Cycle”, which typically leads to new highs. The wise and profitable trader dares not fade these type of moves, but rather embraces the directional trend until there is a definitive shift in market dynamics.

Today is Cycle Day 2 (CD2)…Price did reach projected high zone as laid out in prior Daily Trade Strategy 12.3.14  There is further upside potential, though today’s expectation would be for some ‘back n fill’ trade ahead of Friday’s economic reports.

Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range on CD2 = 14.50; Max Range = 22.25; Possible High = 2085 – 87 zone based upon converting CD1 high; Possible Low = 2061.50 based upon average range observed on CD2.

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

Today’s Hypotheses:

Scenario 1: This “Power Cycle” has sustained buying energy below the surface, so any pullback may be shallow…IF price can clear and convert PDH (2076.00), THEN there is a 60% chance of price reaching 2078.75 – 2080.50 zone, followed by TargetMaster Range Breakout Level 2082.75. Cycle expansion targets 2084 – 2087 zone.

Scenario 2: Today is CD2…As such, we would anticipate some ‘back n fill’ price action with relative shallow pullbacks…Initial support zone 2068 – 70, then 2064 – 66 ORRMP and VTMP. Key support resides within the 3D CPZ 2062 – 2060 handle.

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 Eight
I can recover from any setback. I have an attitude of abundance. I affirm abundance in the universe. I know I cannot begin to count the stars. I realize the ocean doesn’t care whether I go to it with a bucket or a teaspoon. I know the market provides a river of opportunities. I invest in my capabilities. I will be happy with my results.

Leave a Reply