Technically the MKT is in NEUTRAL TRANSITION and has produced a positive signal which should influence the MKT today if the signal is valid. If the integrity of the prior session's high remains intact it is less likely to do so with the MKT returning to a sideways trade. Roll with any new strength and leverage up if good risk parameters present themselves. The potential to get in at the beginning of a new move higher is real.
Key off the 12948 support and 12913 Inflection Pivot. If the MKT is going to rotate higher it will do so from either of these levels. A breach of 13018 confirms this outlook. A break under 12913 puts the contract back in a vulnerable position.
On the SELL side REVERSAL strategies can be executed off of major resistance levels at or near the previous session high point. Avoid this strategy on higher levels as any new strength has the potential to be the beginning of a move. If the integrity of the previous session high remains intact FADE strategies can be accepted at or near this level on the initial test with tight profit target objectives. If the MKT has already had a reaction off this resistance area avoid this strategy. Use a BREAKOUT strategy below 1082.25 as a signal to FADE a positive pull-back after a confirm break in the momentum. Only take this trade if the previous session high point remains intact. Otherwise this will be a BUY REVERSAL opportunity.
On the BUY side be more aggressive after the previous session high has been taken out. Not that this is a pre-condition but should be noted as a confirmation of strength. BREAKOUT strategies above 1091 and 1098.50 should just "go" so keep risk parameters tight. FADE into any negative reaction off an unsuccessful upside BREAKOUT after a support level is confirmed. Use a REVERSAL strategy to leverage up after the MKT gets back above the original breakout point. If the integrity of the previous session high remains intact, avoid REVERSAL strategies as any break momentum is a negative signal that the MKT is going to return to its neutral posture. FADE strategies off the 1082.25 Inflection Pivot are recommended early in the session or near the end. The positive signal will either play out from the get go or will make its move in the latter stages of the trading session.
Note: This is a dangerous emotional trading environment. Expect MKT reactions to go a little further that you expect in either direction so anticipate this in your position and risk management.
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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