- The MKT has just produced a big positive technical signal. On the SELL side DP BREAKOUT strategies are a low probability but valid. Risk little and go for a lot. If the MKT is going to turn sour, it should be quick and relentless. Avoid UP FADE strategies as the MKT has just produced a major buy signal and fresh gains are expected. UP REVERSAL strategies as well are not recommended, as any resistance level violation that cannot be held is more likely a squeeze for the longs, which can quickly turn positive.
- On the BUY side BREAKOUT, FADE and REVERSAL are recommended as the MKT is aggressively bid and all buy signals are valid opportunity. If stopped out at or near the low tic of a reaction and the MKT is not following through to the downside, leverage up using the squeeze low as a stop, expecting a quick reaction back above your original entry. De-leverage unless you have confluence with other indicators or like MKTs.
Today's PRICE MAP Performance for ND
Wrap Up
- The optimal market TACTIC in a BULL TREND market state is the moving average crossover system. The "tell" as to whether or not this tactic will be effective is if the market performs to expectations, making higher move highs and higher move lows. Since the overnight / early morning session played host to a slow decline (creating a lower low and lower high) this was our signal to run our optimal hedge tactics. The 14-period RSI highlights the 70 - 30 level in red and green respectively. The blue line below the 30 level is drawn to show the extreme low that occurred in the oscillator last night. Notice the location of the RSI when the market sold off to our R LEVEL. The RSI put in a HIGHER low creating a BULLISH DIVERGENCE. The occurrence of this signal at our key inflection point (R LEVEL) gave us confidence that the R Level would maintain structure and offer traders an opportunity to get long the market. After price traded back above the DP, traders were given the BUY DP REVERSAL opportunity as highlighted in our market commentary. From that point, the market built positive structure, eventually allowing traders to take profits at the DIR.
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