Identifying MARKET STATE, STRUCTURE and STRATEGY solutions
Monday, July 16, 2012
SP500 U'12
TECHNICAL STATE: #NEUT - NEUTRAL DIGESTION TRANSITION
The market in a NEUTRAL DIGESTION TRANSITION has typically been in a NEUTRAL market state for at least 3 trading periods and is ready to make a decisive move out of it’s “range” trade. This is a “pivotal” trading period with the potential to be the start of the next significant advance or decline. This Technical State can present difficult trading conditions with false signals in both directions common. The MKT is gearing up for a move and will either continue to narrow its recent trading range or “bust” out into a new trend. Opportunity exists on both sides of the market, however aggressive risk management should be implemented. REVERSAL and BREAKOUT strategies are recommended over fading momentum. Successful BREAKOUT strategies under these conditions are typically “one-shot” opportunities, using aggressive trail stops.
TECHNICAL STATE: #NEUT - NEUTRAL DIGESTION TRANSITION
The market in a NEUTRAL DIGESTION TRANSITION has typically been in a NEUTRAL market state for at least 3 trading periods and is ready to make a decisive move out of it’s “range” trade. This is a “pivotal” trading period with the potential to be the start of the next significant advance or decline. This Technical State can present difficult trading conditions with false signals in both directions common. The MKT is gearing up for a move and will either continue to narrow its recent trading range or “bust” out into a new trend. Opportunity exists on both sides of the market, however aggressive risk management should be implemented. REVERSAL and BREAKOUT strategies are recommended over fading momentum. Successful BREAKOUT strategies under these conditions are typically “one-shot” opportunities, using aggressive trail stops.
If the
market is going to “go” it should continue to hold structure. If not a REVERSAL
back into a messy sideways trade should be expected.
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