908 remains the Inflection Pivot to key off for the MKT bias. Trading below here has the contract hard pressed with the 875 and 862.50 support target levels in play for any downside follow through.
As a practical application to entry strategies using Inflection Pivots lets review the action from the July 2, 2009 post.
The MKT started the session above the 908 Inflection Pivot with a positive signal bias providing a FADE buy as the initial opportunity, which resulted in a stop loss of -4pts.
The 908 level was identified as pivotal with a counter signal negative opportunity on a breakdown failure. “A break under 908-907.25 negates the positive signal and turns sentiment sour targeting 889.50 on any negative turn of events.”
The Index provided a BREAKOUT signal which attained the initial downside target resulting in a +17pt gain.
A FADE and BREAKOUT are two classic entry strategies to use when trading an Inflection Pivot. The other strategy is a REVERSAL.
The REVERSAL strategy played out this week in the Crude Oil Q'09 contract. From the 6-29-2009 post the 70.85 was identified as the Inflection Pivot.
Monday's action produced a negative signal and Tuesday's action started off below the 70.85 Inflection Pivot putting the MKT in a negative bias. After a false BREAKOUT the MKT produced a REVERSAL and followed through down to the 66.90 target.
Using defined entry strategies off qualified Inflection Pivots provides hard structure that allows you to define your risk. With proper risk management you are able to put yourself into opportunities where you can be wrong more times than you are right and still be profitable.
JS
This commentary supports JS Services Strategy Based Trading approach. For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.
The Inflection Pivot levels are available as a chart overlay on the following platforms; Ninja trader, Strategy Runner and eSignal. Sign up for a Complimentary Trial.
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