- The MKT has a soft tone against an underlying positive
trend. On the SELL side accept UP FADE signals on the 1st or 2nd press into the
area only. REVERSAL strategies should only be done off the UP or the previous
session high point and will immediately work if they are going to. Keep
position and risk management tight on these trades. SELL DP BREAKOUT strategies
are aggressive but do have potential to be the start of a larger corrective
turn. Keep risk management tight.
- On the BUY side accept REVERSAL signals off all major
inflection levels, expecting the underlying positive momentum to resume. DP
FADE strategies will work better with confirmation as the MKT is in a
corrective state and will be probing lower looking for soft spots. Work any BUY
DIR and UP BREAKOUT strategies as any positive shift in momentum has the
potential to be the start of the next leg higher. DIR FADE strategies after the
UP Breakout should use greater leverage.
-The S&P 500 Index has produced a negative signal in an underlying positive market for today. The "Bull Trend Correction" state with the R Level at the UP tells the trader that the underlying trend is positive; however, today's opportunity is on the short side of the market, below the Sentiment Bias. The market had a brief rally above the DIR, but failed to hold structure above that level. From here, the market sold off to the DP, digested for a brief period, and then presented the trader with a "Sell DP Breakout" opportunity around 10:45 A.M. Although this strategy is aggressive, it proved to be the right one, and the beginning of a corrective move lower. The underlying tone of the market must be respected in this Market State, and tight position management must be implemented. The Breakout from the DP continued, virtually uninterrupted, to the DT1, which presented a good opportunity for realizing profits.
