Technically the MKT has produced a major positive signal into the upper extreme and will need to hold structure if it is going to avoid a drop back into a digestive trade. Key off the 2741.0 Inflection Pivot for an indication of the session tone. If the MKT is going to hold structure it will maintain a trade above here. If not the contract is vulnerable to a retreat down to 2695.0, if not 2603. Notable resistance at 2787.0 will gauge any new strength.
On the SELL side UP FADE signals are valid but REVERSAL strategies are a better option. Have resting limit orders off support inflections and use aggressive position management to lock in any unrealized gains on any REVERSAL trade. DIR and DP BREAKOUT strategies are aggressive but do have the potential to profit from a quick negative move out of the extreme. Use tight position management for these strategies as any unrealized profits can be erased quickly by the underlying positive momentum.
On the BUY side accept DP FADE signals after confirmation. The MKT is extended and may search for stops before it resumes its Bull move. REVERSAL strategies are a better option. The sharper the break, the better for an entry with the expectations that the MKT is going to revisit the recent move high. BUY DIR and UP BREAKOUT strategies may need to be "worked" as the MKT is extended and has the potential to produce some starts and stops.
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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