Technically the MKT is in a BULL TREND ACCELERATION posture and has produced a big positive signal. The MKT should "run" to a new level if the signal is valid targeting 121.23 on any positive follow through. Key off the 120.46 Inflection Pivot. This is the base supporting the underlying positive momentum. If the MKT is heading higher it will not do much if any trading below here. A breach of 120.89 confirms fresh interest.
On the SELL side REVERSAL strategies can be executed at extremes following an exhaustive signal. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. A gradual decline following a reversal signal and it is more likely just a pause before another round of buying, so lock in any unrealized gains. SELL FADE strategies have potential but wait for repeated tests, with the best opportunity not violating the resistance level. Consider rolling long on any stops with this strategy. SELL BREAKOUT strategies are not recommended but can be used as a signal for a FADE against Directional resistance.
On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous session's low point. BREAKOUT strategies early in the session may have issues holding structure, so respect any break in momentum. BUY FADE strategies 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 and 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
* ENTRY STRATEGY - 5min web video explaining FADE, BREAKOUT and REVERSAL strategies http://www.jsservices.com/education/sbt/CME _EntryStrategies5min.wmv.
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