Technically the MKT is in a NEUTRAL CORRECTIVE state producing a big positive signal against a negative trend. Opportunity exists on both sides of the MKT however the contract is vulnerable to a return to the offer with all trading below the 367-4 Inflection Pivot.
On the SELL side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the negative momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies against the 361-0 and 367-4 resistance levels, which should have at least 1 if not 2 challenges to the integrity of the resistance before executing a sale against it. BREAKOUT strategies below 348-0 can risk a little more if current events and other MKTs of confluence confirm a negative posture. If not a better approach would be to FADE a positive "squeeze" reaction after a negative breakdown signal against 354-4 as the neutral technical position can keep the trend sideways.
On the BUY side avoid FADE strategies until after the previous session high point or major resistance level has been taken out to confirm a positive shift in momentum. REVERSAL strategies should be avoided as any negative signal is more likely an indication that the underlying trend is going to resume. BUY BREAKOUT strategies above 361-0 can be profitable up to 367-4 but should look to take profits and potentially REVERSE short at resistance targets. The trade is counter trend so avoid any positive commitments.
Note: The MKT has produced a big technical signal against the current trend. Be aware that the positive action may be a 1-day event with the negative trend quickly re-establishing itself. If the MKT is really going to turn it should remain firm and not look back.
JS
This post supports the Strategy Based Trading, which is a methodology that focuses on the applied strategy verses a specific market. The approach looks to align strategies with markets whose current technical behavior matches the strategies criteria. Please review the following CME sponsored tutorial for a complete overview of this approach.
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/.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 FREE Trial.
