ENERGY - NAT GAS G'10 - NEUTRAL NEGATIVE EXTREME
Technically the MKT is at a NEUTRAL NEGATIVE EXTREME and is ready to either pop back into a firm neutral posture or break into a new down trend. The MKT has produced a technical sell signal into the 5.314 support and is in a "Make or Break" scenario. Volatility as well is on the fence and ready to rise with a new trend move and decline with some sideways "positioning".
Key off the 5.516 Inflection Pivot for an indication of the session tone.
On the SELL side accept FADE and BREAKOUT strategies expecting an immediate follow through to the MKT's technical sell signal. BREAKOUT strategies below 5.314 should be worked with the expectation that any sustained trade and repeated tests of support will give way to negative follow through. This strategy is vulnerable to the MKT expanding its lower support band in a series of starts and stops. Keep profit targets extended to pay for any monies spent holding a position. FADE strategies against 5.516 should expect an immediate reaction as any held trade or violation of major resistance foreshadows a potential turning point. These are good opportunities to "roll" into a long position when stopped out.
On the BUY side FADE and REVERSAL strategies off 5.314 and 5.121 support levels are qualified however the FADE is a lower probability and should use tight risk criteria. REVERSALs can risk more but should also go for more profit with the expectation of a turning point "key reversal" signal to play out. BREAKOUT strategies above 5.516 are aggressive and should just "go" and not look back targeting 5.758 and 5.872. Risk less and go for more. A laborious lack-luster rise after a positive breakout is a sign that the MKT is more likely expanding its resistance lid for a new consolidation verses transition from negative to positive technical posture.
Note: The MKT has produced a negative signal but it is not confirmed and trending indicators do not support follow through in either direction at this time. The MKT has the potential for big range conditions so don't get stuck FADing momentum in either direction.
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.
