Trade Strategy 12.8.14

Despite marking a new all-time high last week and expending lots buy buy-side energy, absorbing overhead supply, on a week over week basis, price has not made much progress. This could be a “tell” that sellers are in greater quantity, making late-comer buyers potentially trapped near the highs. Of course, only time will ultimately prove this assumption true or false…Volume evidence supports the inference that buyers may now be full at the current higher price levels. It would take a violation of 2060 handle followed by confirmed violation of  2045 handle to increase probabilities this assumption is correct.

Today begins new Cycle Day 1 (CD1)..Expectation is for weakness to probe for new “secure low”…Odds (71%) favor a decline greater than 10 handles…Price is currently down -7.50 handles in overnight trade action.

Odds of Decline > 10 = 71%; Odds of Decline > 20 = 41%; Average Range on CD1 – 18.75; Max Range = 21.75; Possible High = 2085 – 87 zone based upon penetration of CD3 high; Possible Low = 2057.75 based upon average decline observed on CD1.

***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 (2079.00), THEN there is a 60% chance of reaching  2085.25, followed by Range Breakout Level 2087 handle.

Scenario 2: Expectation is for probe lower on CD1…Should this develop, odds favor initial level 2069.00 (10-Handle Rule), followed by 2066.50, then Range Breakdown Target 2064.50. Failure to find responsive buyers in sufficient quantity and aggressiveness suggests continued probe lower to find a new secure low. Extreme downside price levels to be mindful of are 2061.50 down to potential CD1 Low projection 2057.75 STATX 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 Ten
I know anything can happen, and I can handle anything that does happen. I am open minded. My thoughts and perceptions are clear. I know what to look for. I have rehearsed everything. I adapt to change. I will listen to my indicators and the patterns that emerge. I will adjust and not demand that things continue as they first started.

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