Technically the MKT is in a BULL TREND ACCELERATION posture and has produced a big positive signal. The MKT is in "play" and aggressive action is expected above the 3340 Inflection Pivot. If the rally is going to extend it will not do much if any trading below here.
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On the SELL side REVERSAL strategies can be executed off the 3483 and 3616 resistance levels. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. A gradual decline folowing a reversal signal and it more likely just a pause before another round of buying, so in either scenerio keep position management tight. Avoid SELL FADE strategies even with confirmation, as this is more likely a lid for a BREAKOUT BUY strategy. SELL BREAKOUT below 3340 strategies are not recommended but can be used as a signal for a FADE against Directional reisstance.
On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous sessions low point. BREAKOUT strategies above 3482 should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in strucutre. BUY FADE strategies off 3340 are recommended over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift. The MKT is aggressively bid which should keep pace throughout the session if the TREND ACCELERATION forecast is going to play out.
Note: The worst-case scenario for a MKT in this technical position is to go higher early in the session and then break all day. Be alert to recognize this. If you have > 3 loser long trades consider taking the next sell signal anticipating a corrective turn. Remember in this technical position if the MKT is going higher it should just go. If not there is the potential for a corrective break or digestive trading environment.
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.
