Technically the MKT is in a BEAR TREND and has produced a negative signal. The MKT is vulnerable and all sell signals should be considered below the 76.43 Inflection Pivot.
On the SELL side accept all BREAKOUT, FADE and REVERSAL signals. If the MKT produces a BREAKOUT signal below 74.89 early in the session it should just "go" and not look back. Beware of any break in early negative structure, as a corrective rally up to resistance is a likely scenario. Be selective and wait for an exhaustive signal to re-enter to avoid selling the corrective rally all the way up to your "ideal" sell at 76.43 and 77.20 but with no confidence left or dry powder. Practice good size management on this move accepting sell signals but leveraging up at the resistance turning points. Anticipate a price "zone" around a major resistance point to FADE. Have a plan and be ready. If your stop gets hit and the MKT does not immediately follow through, consider re-entering, even doubling up if there is structure to define low risk. Follow any corrective rise with a REVERSAL strategy. Expectations are for the negative signal to follow through even if it does in the last hour.
On the BUY side REVERSAL strategies can be executed off of the 74.89 and 72.19 support levels but preferably after an emotional sell off early in the session. This is an aggressive strategy and any profits should be realized at the previous support failure points. Expectations should be for an immediate "V" bottom turn with the MKT quickly moving away from the area or a gradual rise with higher lows after a lower exhaustive signal. Avoid FADE BUYS even with confirmation, as this is more likely a plateau for a BREAKOUT SELL strategy. BUY BREAKOUT strategies above 76.43 and 77.20 are not recommended but do have a better chance of succeeding than a FADE.
Note: The MKT has produced a negative signal and should follow through with authority from the get go if it is serious. If not expect some starts and stops. Be patient and wait for opportunity. As soon as the MKT starts to look "good", its time dial in your sell strategies, especially if the integrity of the previous session high point remains intact. Above the previous session high point and all negative bets are off.
JS
* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv .
To learn more about JS Services Strategy Based Trading approach please contact me at info@jsservices.com . You can also visit http://www.jsservices.com/ and sign up for a Complimentary FREE Trial.
