- Technically the MKT is vulnerable to the offer. On the SELL side accept all BREAKOUT, FADE and REVERSAL signals. The MKT is on edge and any negative signal, especially below the previous session high, is an opportunity. Anticipate a price "zone" around a major resistance point to FADE. Have a plan and be ready. If your stop gets hit and the MKT does not immediately follow through, consider re-entering, even doubling up if there is structure to define low risk.
- On the BUY side REVERSAL strategies can be executed off of major support levels but preferably after an emotional sell off. This is an aggressive strategy and any profits should be realized at the previous support failure points. Avoid DP FADE BUYS even with confirmation, as this is more likely a plateau for a BREAKOUT SELL strategy. UP BREAKOUT strategies are not recommended but do have a better chance of succeeding than a DP FADE.
Today's PRICE MAP Performance for CL
Wrap Up
- In a BEAR TREND market state with the R LEVEL at the DIR, our expectation is that if there is going to be any follow through on the BEAR TREND signal, the market should maintain negative structure below the R Level. In a TRENDING market state, the MOVING AVERAGE CROSSOVER system is the optimal technical tactic to help identify trading opportunities. A little after 7 am CT, the faster MA crossed from above to below our slower MA generating a "sell" signal. This gave traders the confidence needed to accept the SELL DP BREAKOUT strategy at 8:30 am CT. The market continued to build negative structure throughout the session, making lower highs and lower lows. Our expectation is for a move tot he DT2; however, the MACD gave us a valuable signal that helped minimize profit give back. As the market put in an intra-day double bottom at our 89.65 level, the MACD produced a DIVERGENCE signal. The second "bottom" in price corresponded with a reading in the MACD that was substantially higher than the previous low, warning of the coming positive momentum. This signal allowed traders to take profits on the trade before the corrective rally had the chance to erase profits.
