Technically the MKT is in a NEUTRAL TRANSITION with sentiment leaning negative and flirting with a negative turn. Key off the 5548.0 Inflection Pivot for an indication of the session tone. If the Index is going to fight off the negative sentiment it will maintain a trade above here. If not this may the leader in a sentiment shift.
On the SELL side accept BREAKOUT, FADE and REVERSAL strategies with the expectation that the current positive to negative transition will continue. Keep aggressive position management on BREAKOUT strategies below 5548.0 as the MKT is still in the neutral zone and has yet to commit to a new trend. A more conservative strategy would be to wait for positive reactions after a negative signal to FADE into against the 5583.0 Directional after a break under 5548.0. The trade should be fluid with the MKT immediately giving background after any positive squeeze. Notable resistance at 5618.0 will contain the Neutral forecast.
On the BUY side avoid FADE strategies off 5548.0 until after the previous session high point or 5618.0 resistance has been taken out to confirm a break in the negative signal. Until then a better opportunity will be a REVERSAL strategy off 5548.0. This is a one shot trade using a low risk big profit target criteria. The idea is that the transition trade is over and a positive shift back into a NEUTRAL DIGESTION is expected. BUY BREAKOUT strategies above 5618.0 can be profitable but they are aggressive and should use the same aggressive position management as a REVERSAL. Risk less go for more.
Note: The MKT is trying to shift from a positive to a negative trend position. False starts and stops should be expected and position management adjustment anticipated, as quick momentum turns are the norm in this technical environment.
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.
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.
