The current bull-run to all-time highs has me recalling the song “Train Kept a Rollin”, originated by The Yardbirds and popularized by Aerosmith. It seems that there isn’t anything that can stop this bull as bears have certainly tried without success. Perhaps its inertial energy will just need to dissipate on its own and exhaust the final bull. Until then, we must continue to respect price and be always vigilant for signs dominance shift.

Fifteen (15) days of continuous higher highs and higher lows without even a meaningful pullback certainly defines the strength of the recent uptrend, but also qualifies overbought (extreme) by anyone’s definition. Be careful not to assign a low probability of reversal on the common (wrong) analysis of “Just Because”…Wait for proper price development that supports increasing odds of pullback/correction…There will be plenty of opportunity to get onboard the short-side trade.

Overnight trade is light with 62K contracts traded at time of writing…Price has not been able to clear Friday’s high of 1949.50, so this will become the initial resistance marker. IF Price can penetrate and convert (PDH), THEN there is a 60% chance of reaching 1955.50 – 1957.25 zone. Failure to convert suggests buyers are exhausted, and price will need to find a lower zone of responsive buyers. Initial pullback support will be 1943 handle, followed by stronger support zone 1938 – 40 zone which also coincides with 10-handle Rule.

Average Daily Range is now 11.25 which is expanding from historical lows of 8+ handles, but still well below historical norm of 17 handles. As traders, we would like price to continue expanding range as wider range provides better intra-day opportunities, which have been difficult to find lately.

Trade Strategy: Today is Cycle Day 3 and price has surpassed cycle targets, so we’ll be watching for early failure to convert PDH to establish trades on the short-side, targeting the 10 handle rule down to 1938.00. Of course we must always play to the strength of dominance.

Remain Focused on the Process…Not the Outcome  ALWAYS USE STOPS!

Good Trading…David

Habitude Nine
I will identify my mistakes and learn from them. I am optimistic, realistic and honest. I will not make up stories about the good or bad things that occurred in the past or are happening now. I admit when something is not working. My optimism gives me faith and courage. I will not fall prey to blame and fear.