5YR TREASURY NOTES

Today's MARKET STATE for 5YR TREASURY NOTES: **NEUTRAL DIGESTION**
 

-The MKT is in a digestive position with a negative technical bias.  On the SELL side accept FADE, BREAKOUT, and REVERSAL strategies off major inflection points.  DP SELL BREAKOUT strategies should just “go” and not look back.  DIR FADE strategies after a negative breakdown signal are good opportunities as well.  If the trade just “hangs around” after a breakdown signal, it is likely that more digestive action is to come.  Be more aggressive with UP FADE and REVERSAL strategies and resistance inflection points at or against the previous session high point.

-On the BUY side DIR and UP BREAKOUT strategies are aggressive and should hold structure if they are good.  DP BUY FADE strategies are aggressive and if they are going to work should do so on the initial test of support.  Repeated tests are more likely to give way to a lower trade.  BUY REVERSAL strategies are recommended off the DP only, as the MKT is vulnerable to a negative trend shift.  The probability is to the downside today so don’t get stubborn buying breaks.

Today's PRICE MAP Performance for FV

Wrap Up
- In a NEUTRAL DIGESTION market state, our expectation is for a sideways trading session with the upper and lower boundaries at the UP and DP within our Price Map.  However, if the market does breakout of this Critical Range, our expectation is for a move of two APMD.  Today in the 5YR TREASURY NOTES we had a downside breakout from the DP generating a SELL DP BREAKOUT signals which was confirmed by price action under the R Level.  With this strategy, our expected target is the DT2 and, as you can see, the market did in fact make it all the way down to our price target at 124'045.

DOW FUTURES

Today's MARKET STATE for DOW FUTURES: **NEUTRAL DIGESTION**

-The MKT has a slight negative bias in a difficult “choppy” trade.  On the SELL side DP BREAKOUT strategies are valid but should expect a laborious trade.  UP and UT1 FADE and REVERSAL strategies are recommended but profit should be taken at initial targets.  The probability is to the downside 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 at the DIR.  DP REVERSAL strategies are recommended over FADE strategies as “sloppy” trading conditions are expected.  Any DP FADE trades should get confirmation before executing.  Position management adjustments should be anticipated for all longs as sideways trading conditions can quickly erase profits.

Today's PRICE MAP Performance for YM

Wrap Up
- The slight negative bias in our NEUTRAL DIGESTION market state was reiterated by the R Level being at the upper end of our Critical Range, the UP.  This signaled traders to look to get short the market from below this level.  Around 9:00 AM the market began to sell off sharply from our DIR.  When price broke through our DP just before 9:30, traders were able to get short the market with a SELL DP BREAKOUT strategy.  With these breakout strategies, we expect to get a move of two APMD (Average Price Map Distance), in this case, the DT2.  The market shot right down to our DT1 where it found support briefly, before continuing down and forming a double bottom formation right at the DT2 level.  Today's action serves as proof that defining market state, structure and strategy is essential to successful trading.

WHEAT

Today's MARKET STATE for WHEAT: **BEAR TREND CORRECTION**

-Technically the MKT momentum is counter trend and will need a strong showing to overcome the underlying negative threat.

-On the SELL side REVERSAL strategies off the UP or near the previous session or move high will work best. DIR or DP BREAKOUT should just go.  A better option is to FADE positive reactions against the DIR after a negative signal.

-On the BUY side accept FADE and BREAKOUT strategies.  BREAKOUT should expect some “start and stops” The trade is corrective and sharp positive surges can be erased in a hurry.  FADE will work if the corrective state is going to continue.  REVERSAL strategies are a lower probability as a break in structure should be considered a potential negative shift in momentum.

Today's PRICE MAP Performance for W

Wrap Up
- The WHEAT market had produced a corrective signal in an underlying bear trend; however, the analyst has placed the R Level at the UP signaling to traders that the opportunity is on the short side of the market below this key inflection point.  The market was trading around the DIR at midnight when it began its descent.  After showing no signs of follow through on the corrective signal, the market broke out to the downside where traders could have entered the market with a SELL DP BREAKOUT strategy.  These breakout strategies usually expect to go for the 2nd target, in this instance, the DT2.  The market stabilized briefly at the DT1 around 10 A.M. and then continued lower to our profit target at the DT2.

CANADIAN DOLLAR

Today's MARKET STATE for CANADIAN DOLLAR: **NEUTRAL DIGESTION**

-The MKT has a slight negative bias in a difficult “choppy” trade.  On the SELL side DP BREAKOUT strategies are valid but should expect a laborious trade.  UP and UT1 FADE and REVERSAL strategies are recommended but profit should be taken at initial targets.  The probability is to the downside 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 at the DIR.  DP REVERSAL strategies are recommended over FADE strategies as “sloppy” trading conditions are expected.  Any DP FADE trades should get confirmation before executing.  Position management adjustments should be anticipated for all longs as sideways trading conditions can quickly erase profits.

Today's PRICE MAP Performance for CD

Wrap Up
- Today in the CANADIAN DOLLAR market we had an MC Value of 0 and a NEUTRAL DIGESTION market state.  Our expectation as traders, is for a sideways choppy trading environment.  The analyst has placed the R Level above the Critical Range indicating to traders that the opportunity is to the downside in today's session.  Around 7:30 A.M. we are given the SELL DP BREAKOUT signal that our market commentary tells us to look for.  Entering the market on the short side from this level proved profitable, as the market sold off through the DT1 and eventually found support at the minor level at 1.0030.

GOLD

Today's MARKET STATE for GOLD: **BEAR TREND**

-The MKT is in a soft neutral position.  On the SELL side UP REVERSAL and FADE strategies with confirmation will be a better option over downside BREAKOUTS, as selling into corrective reactions is the best position.  The MKT remains negative but be patient as to not get caught FADING a corrective rise all the way up.  DP BREAKOUT strategies are valid opportunities but look to take profits on emotional drops versus getting trail stopped on corrective pull backs.

- On the BUY side DIR and UP BREAKOUT strategies should be looked at as a “one-shot” deal.  Either the MKT railroads higher in a steady climb or it’s just a head fake to sell.  If you get on a steady advance, ride it until structure is broken.  DP and DT1 REVERSAL strategies are valid, as the neutral tone has the potential to produce false signals in either direction.  Avid DP FADE BUYS as the negative trend remains in force.

Today's PRICE MAP Performance for GC

Wrap Up
- With an MC Value of -5, the GOLD futures market followed through on the BEAR TREND market state signal.  The break in structure at the DP around 10:30 allowed traders to get short the market with a SELL DP BREAKOUT strategy.  With the market transitioning lower, we usually expect a move of 2 APMD, in this case, to the DT2.  The market stabilized at the DT1 for a brief moment around 11:30 before continuing all the way down to our profit objective at the DT2.

DOW FUTURES

Today's MARKET STATE for DOW FUTURES: **BULL TREND CORRECTION**

-The MKT has produced a big negative signal against an underlying positive trend.  On the SELL side accept UP FADE signals on the 1^st or 2^nd 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 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.

Today's PRICE MAP Performance for YM

 

Wrap Up
- Today in the DOW FUTURES market we had a corrective signal against an underlying positive trend.  If we are to get any follow through on the corrective signal, it should occur BELOW the R Level.  Around 8:45 A.M. price traded above the R Level signaling to traders that the underlying positive trend may be resuming.  After selling off back to the R around 9:30, the market found support at this level, allowing traders to get long the market from the R Level in anticipation of a resumption of the positive trend.  This proved to be the correct trade as the market rallied past the UT1 to end the session.

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