Well Defined Trading Range

Reviewing price action in S&P e-mini futures (ES) for the past ten (10) trading sessions reveals a well-defined trading range with 1945 lower edge and 1978 upper edge. We have opined that a Change of Character (COC) was developing…Uptrending action to now Range Consolidation. Investment Managers continue to evaluate corporate earnings reports, and as such remain responsive buyers at lower edge of range, as well as responsive sellers at upper edge of range. Sector Rotation and Market Internals continue to remain healthy…Until there is a marked change in sentiment, expectation is for continued back n fill price action. One “wildcard” which is always present and difficult to predict is the ongoing Geo-Political unrest in the Middle East and Ukraine. Further escalation is a real factor in destabilizing world markets.

Overnight trade has price slightly lower on average trade size…Price is firmly above Friday’s Volume-Trend MidPoint (1964)…which becomes initial Decision Point (DP) Marker.

Today’s Hypotheses:

Scenario 1:  Prior Day High is 1974.25…IF price can penetrate and convert this level, there is a 65% chance of reaching upper targets 1975.25…then 1978.75 – 1982.25 STATX Zone extreme. Initial upside marker to key from is 1971.50 for increasing bullish momentum.

Scenario 2: Key Marker for support to watch is 1964 – 66 zone…Expectation is for this zone to hold on pullbacks…Violation and conversion of this zone targets 1958 – 60 zone.

Trade Strategy: Price continues to oscillate within a wide range band from day-to-day…Intra-day trade has been trending within a wider cycle range (1945 – 78)…We will actively trade both sides at key Decision Point (DP) levels identified in the Live Trading Room…We will be buyers within 1964 – 66 zone with valid signals…Fade upper zone between 1971 – 74…Remain Flexible.

Stay Disciplined…Follow Your Trade Plan….ALWAYS USE STOPS!

Good Trading…David

Habitude Two
I am detached from the results. I think in terms of the process and the validity of the process. I understand that I am more than the trading. I do not tie a fragile ego to any day’s trading results. I have faith that over time I will make money. The results of any one trade are statistically unimportant. I think in term of probability. A single trade says nothing about me as a person.


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