Technically the MKT is in a NEUTRAL CORRECTIVE state producing a negative signal against a positive trend. Opportunity exists on both sides of the MKT however the threat of further losses will weigh on the Index below the 5671.0 Inflection Pivot. A break under 5597.0 confirms fresh losses targeting 5523.0 on any downside follow through. 5467.5 is the session extreme. A rise above 5671.0 turns the trade digestive.
On the SELL side avoid FADE strategies until after the previous session low point or major support level has been broken to confirm a negative shift in momentum. Until then a better opportunity will be a REVERSAL strategy but only off the 1st major resistance level. This is a one shot trade using a low risk big profit target criteria. The idea is that if the MKT is going to follow through on its negative signal any strength is just a "head fake " before it follows through. SELL BREAKOUT strategies can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is corrective and the underlying positive tone must be respected.
On the BUY side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the positive momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies can risk a little more if current events and other MKTs of confluence confirm a positive posture with the expectation that the Bull Trend is going to resume. If not a better approach would be to FADE a negative "squeeze" reaction after a positive breakout signal as the neutral technical position can keep the trend sideways.
Note: The MKT is in a corrective position with the potential to move in either direction. Keep your opinions to themselves and focus on what the MKT is telling you it wants to do. Don't fight it, roll with it.
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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