Technically the MKT is in a BEAR TREND but in a DIGESTIVE posture. The MKT has produced a negative signal but has yet to confirm a shift into trend mode. Opportunity exists on both sides of the MKT but selling strength is the better opportunity.
Key off the 76.00 Inflection Pivot. If the MKT is bad it will break below here and not look back targeting 74.12 on any negative turn of events. A held trade above this Inflection Pivot and sentiment has the potential to shift. A breach of 77.25 confirms this outlook targeting 77.97 on the initial pop. Expect a reaction. 79.12 is the extended target for any reversal of fortune.
On the SELL side accept FADE, BREAKOUT and REVERSAL strategies off major inflection points. SELL BREAKOUT strategies should just "go" with the expectation of a clean breakout signal into a new trend. FADE strategies after a negative breakdown signal are good opportunities as well but expectation should be for the MKT to quickly move back under the failed support. If the trade becomes laborous it is more likely a signal that more digestive action is coming and a retest of resistance should be expected. Be more aggressive with FADE and REVERSAL strategies at or against the previous session high point targeting the opposing digestive support. Above the previous session high point entering after the 2nd or 3rd press into an area is recommended over stepping in front of the initial challenge.
On the BUY side BREAKOUT strategies are aggressive and should be entered sooner [lower] than later [higher]. Expectations should be for the MKT to make its move early in the session and not look back, holding structure most of the day. If the MKT digests prior to making a positive move it is more likely a short squeeze to FADE. BUY FADE strategies are aggressive and if they are going to work should do so on the initial test of support. Repeated tests or "confirmation" are more likely to give way to a lower trade. BUY REVERSAL strategies are recommended off the session initial major support only, as the MKT is vulnerable to a negative trend shift. The probability is to the downside today so don't get stubborn buying breaks.
Note: The MKT has produced a negative signal and is flirting with a turn for the worse. If it does not follow through on any new weakness a positive "reversal" is a likely outcome with a retest of the digestive resistance.
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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