Technically the MKT is in NEUTRAL TRANSITION and difficult trading conditions are expected. The MKT has produced an strong positive signal which should keep the MKT firm today if the signal is valid. If the integrity of the prior session's high remains intact a return to a sideways trend less trade is likely. Roll with any new strength and leverage up if good risk parameters present themselves. The potential to get in at the beginning of a new move higher is real.
The 15410 Inflection Pivot is the base supporting the positive signal. If the currency is heading higher it will not do much if any trading below here. A breach of 15534 confirms the positive sentiment targeting 15689 on any new advance. A break under 15379 negates the optimistic outlook.
On the SELL side REVERSAL strategies can be executed off of major resistance levels at or near the previous session high point. Avoid this strategy on higher levels as any new strength has the potential to be the beginning of a move. If the integrity of the previous session high remains intact FADE strategies can be accepted at or near this inflection point on the initial test with tight profit target objectives. If the MKT has already had a reaction off this resistance area avoid this strategy. Use BREAKOUT strategies as a signal to FADE a positive pull-back after a confirm break in the positive momentum. Only take this trade if the previous session high point remains intact.
On the BUY side be more aggressive after the previous session high is taken out. Not that this is a pre-condition but should be noted as a confirmation of strength. BREAKOUT strategies should just "go" so keep risk parameters tight. FADE into any negative reaction off an unsuccessful upside BREAKOUT after a support level is confirmed. Use a REVERSAL strategy to leverage up after the MKT gets back above the original breakout point. If the integrity of the previous session high remains intact, avoid REVERSAL strategies as expectations are that the "positive" signal is going to follow through it should do so straight away and any break momentum is a negative signal that the MKT is going to return to its neutral posture. FADE strategies are recommended early in the session or near the end. The positive signal will either play out from the get go or will make its move in the latter stages of the trading session.
Note: This is a dangerous emotional trading environment. MKT reactions to go a little further that you expect in either direction so anticipate this in your position and risk management.
JS
* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME_EntryStrategies5min.wmv .
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