Today we are going to focus on MKTs that have produced a negative signal against an underlying positive trend or a BULL TREND CORRECTION signal state.
The question, is this negative signal going to follow through or is this just a 1 day event and the underlying positive momentum is going to resume. The price point that answers this question and determines this "sentiment shift" is the session Inflection Pivot. This is the price point that defines the technical state from being a negative "corrective"posture below that price point to a positive BULL TREND position above that price point.
For OCTOBER 26, 2009 all markets that have produced a BULL TREND CORRECTIVE signal are CURRENTLY above their Inflection Pivot. In this situation the Inflection Pivot is basically saying "prove it to me". If the market is bad it should break below the Inflection Pivot and not look back. A held trade above this price keeps the market in a firm digestive trade.
Today I have added an additional price level, a resistance pivot or Upside Pivot. This is the price point where the positive underlying trend should be expected to resume. Each level should be drawn on an intra-day chart for a visual presentation of opportunity. Trading above the Inflection Pivot keeps the market firm however a resumption of the BULL TREND is not confirmed until the market is above the Upside Pivot. This application is available for automatic updates in following platforms: Strategy Runner, Ninja Trader and eSignal. Click here for a Complimentary FREE Trial.
EQUITY FUTURES [DEC09]
SP500 1056.75 Inflection Pivot : Upside pivot 1082.50
Nasdaq100 1716.50 Inflection Pivot : Upside Pivot 1779.50
Dow Futures 9927 Inflection Pivot : Upside Pivot 10029
FOREX
AUDUSD 9201 Inflection Pivot : Upside Pivot 9277
Commodity [Dec' 09]
CORN 389-0 Inflection Pivot : Upside Pivot 408-0
Metals [Dec'09]
GOLD 1043.7 Inflection Pivot : Upside Pivot 1069
Draw a line on your intra-day chart at these levels. Look for opportunity in the direction of the Inflection Pivot price bias. Executing at or near these price points will provide the best risk / reward. SELL BREAKOUT below the Inflection Pivot as well as BUY REVERSAL on a false breakdown signals are opportunity. SELL FADE against the Upside Pivot expecting the negative signal to continue or BUY BREAKOUT entry strategies above the Upside Pivot should be considered expecting the BULL TREND to resume.
Good Trading.
JS
Strategy Based Trading is a methodology that focuses on the applied strategy verses a specific market and looks to align strategies with markets whose current technical behavior matches the strategies criteria.
STRATEGY BASED TRADING Review http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html
For more information please contact me at info@jsservices.com. You can also visit http://www.jsservices.com/.
