Markets are lower in overnight and early morning trade as yesterday’s sell-down continues. In prior Daily Trade Strategy Report 12.8.14 we were anticipating weakness into this Cycle as the bulls had lost their strength to push prices higher. Price has now violated the Cycle Day 1 Low (2053.75) which has accelerated price lower…Continued weakness may force some long liquidation this week, so it is important for buyers to respond as they have in past to push prices back up above Cycle Day 1 Low (2053.75).
Today is Cycle Day 2 (CD2)…Odds of Rally > 10 = 82%; Odds of Rally > 20 = 45%; Average Range on CD2 = 14.50; Max Range = 22.25; Possible High = 2088 based upon penetration of CD1 high (unlikely)…Possible Low = 2042.75 based upon violation of CD1 low (already achieved in pre-market).
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses:
Scenario 1: Price needs to find responsive buyers above 2043 level to have a chance to recapture lost ground…First upside objective is 2048 handle, followed by 2053.75…Weak response will make these objectives difficult to achieve….
Scenario 2: Price momentum has driven price down to violation projected target 2042.75…IF selling momentum continues into day-session, THEN next downside cycle expansion target is 2036.50. Deep STATX Xtreme Zone is between 2033.75 – 2025.50.
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 Eleven
I am courageous and I always act, even in the face of uncertainty and possible loss. Do not say, no fear. Feel the fear and act anyway. I may be frightened, but I still saddle up. I am not reckless. I act promptly in accordance with my methodology. I respect my calculations. I have a healthy respect and I balance that respect with my courage. I am an explorer. I am on a hero’s journey.