DAX INDEX

Today's MARKET STATE for DAX INDEX: **NEUTRAL DIGESTION**

- The mkt IS in a sideway digestive position with a slight positive bias.
- On the SELL side avoid DP BREAKOUT strategies but rather FADE a positive reaction against the DIR after a negative breakdown signal  UP and UT1 REVERSAL strategies are recommended over FADE strategies as “sloppy” trading conditions are expected.  Any UP FADE trades should get confirmation first.
- On the BUY side UP BREAKOUT strategies are valid but should expect a laborious trade.  Work any position, selling into emotional surges and re-entering on any sharp pullbacks.  Expect a choppy trade and be aggressive on minimizing profit give-back.  DP and DT1 FADE and REVERSAL strategies are recommended.

Today's PRICE MAP Performance for DAX

Wrap Up
- Today in the DAX INDEX futures market, we had extremely choppy market action staying true to the NEUTRAL DIGESTION market state.  With an MC Value of +3, we know that there is a slight positive bias on the neutral market state, and we should look to accept buy signals ABOVE our R Level.  Around 2:00 AM, the market gives us our opportunity to enter the market with a BUY DP REVERSAL strategy as recommended by our market commentary.  Our expectation is for price action to stay within the Critical Range and position management should be tight.  The market rallied sharply up to the DIR at around 3:30 AM where it digested for the better part of the morning session.  After failing to penetrate the minor level at 7352.0 at 7:00 AM, the market began a rally that eventually made it up to the upper end of our expected trading range at the UP.

BRITISH POUND

Today's MARKET STATE for BRITISH POUND: **BULL TREND CORRECTION**

 

- The MKT has produced a negative signal against an underlying positive trend. On the SELL side accept UP FADE signals on the 1st 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 traded. SELL DIR and DP BREAKOUT strategies are aggressive but do have the 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.

Today's PRICE MAP Performance for BP

Wrap Up
Today in the BRITISH POUND futures market, our Critical Range helped define the trading range for traders.  In a BULL TREND CORRECTION market state, the market has generated a corrective signal against the underlying positive trend.  Any short position taken today should use strict position management as the underlying bull trend must be respected.  After the  Around 2:00 AM we get a SELL DIR BREAKOUT strategy that is in agreement with our R Level at the UP.  As stated earlier, the underlying bull trend of the market must be respected, and profits should be taken sooner rather than later.  After entering the trader at 2:00 AM, the market attempted a retest of the DIR and failed around 3:00 AM confirming our trade.  The market then broke sharply and sold off to the DP, where profits could have been realized.  By defining the expected trading range for the day, JS traders were able to capitalize on the corrective move in the British Pound.

WHEAT

Today's MARKET STATE for WHEAT: **NEUTRAL DIGESTION**
 

-The MKT is in a sideways digestive position with a slight positive bias.

- On the SELL side avoid DP BREAKOUT strategies but rather FADE a positive reaction against the DIR after a negative breakdown signal.  UP and UT1 REVERSAL strategies are recommended over FADE strategies as “sloppy” trading conditions are expected.  Any UP FADE trades should get confirmation first.

- On the BUY side UP BREAKOUT strategies are valid but should expect a laborious trade.  Work any position, selling into emotional surges and re-entering on any sharp pullbacks.  Expect a choppy trade and be aggressive on minimizing profit give-back.  DP and DT1 FADE and REVERSAL strategies are recommended.

Today's PRICE MAP Performance for W

 

Wrap Up
The Critical Range worked to perfection today in the DEC '12 WHEAT market.  With an MC Value of +3 and a NEUTRAL DIGESTION market state, our expectation is for a sideways trading environment within the Critical Range with a positive sentiment bias on the day.  Our market commentary tells us to accept BUY DP FADE strategies.  The placement of the R Level at the DP adds weight to this inflection point, and makes it the best opportunity for the day.  Right around 8:00 A.M. the market sells off to the DP and gives us an opportunity to execute our BUY DP FADE strategy.  The market respected the support at the DP and rallied sharply throguh our DIR all the way to the upper end of our Critical Range at the UP, where profits should have been realized.  Another example of how defining the structure of the market can help good traders achieve greatness.

EURO CURRENCY

Today's MARKET STATE for EURO CURRENCY: **BULL TREND DIGESTION**

 

-The MKT has a positive lean and will maintain this posture above the previous session low point.  On the SELL side accept FADE and REVERSAL signals at the UP and +c.  The underlying momentum is up, however short fast negative reactions are expected.  Keep position management and profit targets aggressive, as these trades are counter trend.  Avoid DP BREAKOT strategies.  Although the digestive posture points to opportunity on both sides, follow through on either is unlikely and less so to the downside.

On the BUY side accept FADE and REVERSAL strategies off the DP with the expectation that any test will likely contain a few starts and tops before a positive reaction.  DIR and UP BREAKOUT strategies should be initiated sooner (lower) than later (higher) as extended follow through potential is not in the forecast.  Have resting limits to exit and an aggressive position management plan as the digestive posture can quickly erase any unrealized gains.

Today's PRICE MAP Performance for EU

Wrap Up
Nice day in the EURO CURRENCY as the market performed to our expectations for a BULL TREND DIGESTION market state.  The R Level at the DP represents the sentiment bias for the day.  We are told to accept BUY DP REVERSAL signals and to expect a few "start and stops".  At 2:30 AM we are given our first BUY DP REVERSAL signal.  The market rallies to our minor level at 1.2957 and then drops back down to the DP where it finds support around 3:30.  After another rally that fell short of the previous, we have a sell off and a second BUY DP REVERSAL signal at 4:30.  From here the market begins to build positive structure, making higher move highs and higher move lows.  Due to the digestive market state, we should exercise tight position management, and profits could have been taken at the DIR at 8:00 A.M.

AUSTRALIAN DOLLAR

Today's MARKET STATE for AUSTRALIAN DOLLAR: **NEUTRAL POSITIVE EXTREME**

- The MKT is pressing the extreme but remains in a firm posture. On the SELL side REVERSAL strategies off the UP and UT1 will work best. If the integrity of the previous session low remains intact, avoid FADE strategies as expectation is for a higher trade. BREAKOUT strategies are a lower probability and should just "go". Risk little and have a resting defined target.
- On the BUY side FADE and REVERSAL strategies are recommended off the DP and DT1. As long as the MKT continues to hold positive structure, these strategies should be aggressively taken. BREAKOUT strategies should only have 1 pullback after a resistance breach, bottoming out above the DIR if they are going to follow through in the session. Any more and the market will be vulnerable to a neutral shift.

Today's PRICE MAP Performance for DA

 

Wrap Up
Today in the AUSTRALIAN DOLLAR market, we had an MC shift of 3 which gave us an MC Value of +3 today.  This drastic move resulted in a NEUTRAL POSITIVE EXTREME Market State.  With the R Level below the DP, our expectation is for a continuation of the positive momentum, and we want to accept BUY signals above the R.  Our market commentary tells us that BUY DP FADE strategies are recommended.  Just after 10 A.M. price action touches the DP giving traders an opportunity to execute the BUY DP FADE strategy.  Since we are in a NEUTRAL market state, we should use tighter position management, and profits should be taken at the DIR just after 1 P.M.

S&P 500

Today's MARKET STATE for S&P 500: **BEAR TREND DIGESTION**
 

-Technically the MKT is leaning lower but has yet to commit to a new negative move.  On the SELL side BREAKOUT, FADE and REVERSAL strategies are valid with the expectation that the underlying negative momentum is going to reassert itself.  Work any UP FADE or REVERSAL strategies within the digestive range, covering any position near the DP.  DIR and DP BREAKOUT strategies are valid, however, they may be choppy and more laborious.  The probability is to the downside today but is not a day to press it.

- On the BUY side avoid UP BREAKOUT strategies but rather FADE a negative reaction after a positive breakout signal against the DIR.  DP REVERSAL strategies are recommended over FADE strategies as “sloppy” trading conditions are expected.

Today's PRICE MAP Performance for S&P 500

Wrap Up
Today in the S&P 500 market, we had a MC Value of -5 and a BEAR TREND DIGESTION Market State.  This is a unique state because we remain in an underlying bear trend; however, we could be in for more of a digestive trade for the session.  Due to the early close of the S&P 500, we published our levels early so that traders could take advantage of the overnight session.  Our market commentary tells us that if we are going to look to BUY this market, that DP REVERSALs are recommended over FADEs as a sloppy trading environment is anticipated.  Just after 10:30 last night, we have a breakdown from the DP, and a quick correction back into the Critical Range, allowing us to execute a BUY DP REVERSAL.  The market continued making higher move highs and higher move lows, confirming that we were on the correct side of the market.  The trade eventually made it all the way up to our Upside Pivot (UP) just before the early close this morning.

EURUSD FOREX

Today's MARKET STATE for EURUSD FOREX: **NEUTRAL DIGESTION**

- The MKT is in a sideways digestive position with a slight positive bias.
- On the SELL side avoid DP BREAKOUT strategies but rather FADE a positive reaction against the DIR after a negative breakdown signal. UP and UT1 REVERSAL strategies are recommended over FADE strategies as "sloppy" trading conditions are expected. Any UP FADE trades should get confirmation first.
- On the BUY side UP BREAKOUT strategies are valid but should expect a laborious trade. Work any position, selling into emotional surges and re-entering on any sharp pullbacks. Expect a choppy trade and be aggressive on minimizing profit give-back. DP and DT1 FADE and REVERSAL strategies are recommended.
 

Today's PRICE MAP Performance for EURUSD

Wrap Up
Today in the EURUSD FOREX market, we had an MC Value of +3 in a NEUTRAL DIGESTION environment.  Our market commentary tells us that we can accept BUY DP FADE and REVERSAL strategies as our expectation is for price to stay within the Critical Range.  Around 5:30 AM the market makes a push through the DP and quickly corrects itself.  After the market made another attempt at the DP and FAILED to put in a lower at 6:45 we are given an opportunity to BUY a DP REVERSAL as the market has told us that it is respecting the Support level at the DP.  In a sideways market, we should keep tighter position management, and profits on this trade should have been taken at the DIR.