Today's MARKET STATE for DOW FUTURES: **BULL TREND**
- The MKT has a firm tone and as long as the integrity of the previous session low remains intact, look for excuses to get long. On the SELL side UP FADE strategies are valid but profit targets and risk management should be tight. REVERSAL strategies should be applied only at the UP and +c after an exhaustive signal. Use DP BREAKOUT strategies as a signal to FADE a positive reaction against the DIR. Only until the MKT breaks the positive structure are sell signals an opportunity.
- On the BUY side BREAKOUT, FADE and REVERSAL are recommended as the MKT is 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, look to re-enter using the recent squeeze low as a stop. If the MKT breaks structure, de-leverage and be more selective as the likelihood of a sideways trade is high.
Today's PRICE MAP Performance for YM
Wrap Up
- In a BULL TREND Market State, our expectation is for a continuation of the underlying positive trend and the opportunity lies on the long side of the market. By the analyst placing the R Level at the DP, the positive sentiment is confirmed and traders should look to accept BUY signals above the R Level. In a TRENDING state like we had today in the DOW FUTURES, Moving Average crossover signals can be very helpful as they may provide a "tell" for the markets future action. As you can see, the faster 26-period SMA crossed above the slower 50-period SMA around 8 am, telling traders to accept BUY strategies. Shortly after, the market broke out of the Critical Range with a BUY DP BREAKOUT strategy. Also, in TRENDING market state, the market should build POSITIVE STRUCTURE by making higher move highs and higher move lows. As highlighted by the blue circles, the market stayed true to form today and made new highs and higher lows throughout the session. Around 2:30 pm the faster MA crossed below the slower MA, followed shortly there after by a break in the positive structure, signaling traders to flatten out their long positions.
Today's MARKET STATE for GOLD: **NEUTRAL DIGESTION TRANSITION**
- MKT sentiment is leaning negative and will outweigh the buy side if the integrity of the previous session high remains intact.
- On the SELL side accept BREAKOUT, FADE and REVERSAL strategies with the expectation that the current negative transition will continue. Keep aggressive position management on DP BREAKOUT strategies as the MKT is still in the neutral zone and has yet to commit to a new trend. A more conservative strategy would be to wait for positive reactions after a negative signal to FADE the DIR.
- On the BUY side avoid DP FADE strategies until after the previous session high point has been taken out. Until then, a better opportunity will be a DP REVERSAL strategy. The idea is that the transition trade is over and a positive shift back into a NEUTRAL DIGESTION is expected. UP BREAKOUT strategies can be profitable but they are aggressive. Risk less, go for more
Today's PRICE MAP Performance for GC
Wrap Up
- With a NEUTRAL DIGESTION TRANSITION Market State, the GOLD futures market is in a Neutral Primary state; however, the market is "in play" and today's session may be the start of a new move. The R Level is above the market at the UP signaling traders to accept SELL strategies. The market building negative structure throughout the morning session serves as our first "tell". Around 6 am, the market gives us a SELL DP BREAKOUT strategy that is in line with out sentiment bias. In these NON-TRENDING market states, it is critical to look at momentum oscillators for "clues" during the session. The indicator that I have included is the 14-period RSI. The red circles represent NEGATIVE REVERSALS in the RSI indicator. In essence, the market is "more oversold" at LOWER price levels, representing weakness and thus, confirming out short position.
Today's MARKET STATE for 5YR TREASURY NOTES: **NEUTRAL DIGESTION**
- Technically the MKT is "on the fence" with the potential to go in either direction or nowhere. Pick your points and have no expectations, as the likelihood of this MKT trading sideways is high.
- On the SELL side BREAKOUT, FADE and REVERSAL strategies are valid, however profit and position risk management should be aggressive and anticipated. The pivotal nature of the session does have the potential to be the starting point for a new move. However, the probability of any trend action is more likely to just be the MKT defining its new consolidation extreme.
- On the BUY side BREAKOUT, FADE and REVERSAL strategies are valid, however profit and position risk management should be aggressive and anticipated. The MKT is "on the fence" and does have the potential to be the beginning of a new trend move. The probability of a new trend move is low. However, any price trend action is more likely to just be the MKT defining its new consolidation extremes.
Today's PRICE MAP Performance for FV
Wrap Up
- Today the 5YR TREASURY NOTES was in a NEUTRAL DIGESTION Market State. By identifying the primary technical state of the market, we know that our expectations for the session is for a sideways, choppy trade within the CRITICAL RANGE. The R Level at the UP identifies the optimal entry point for the session and informs traders that the opportunity is to the downside as long as the market is trading below this level. In a non-trending market state, traders should look to key in on momentum oscillators to identify trading opportunity. The 14-period RSI on the bottom of the chart highlights a divergence in the oscillator that occurs AT our KEY INFLECTION POINT. The market approaches the R Level for a second time; however, this time the oscillator fails to confirm the move by putting in a LOWER top. This tactic illustrates weakness and gives us our "tell" to accept the SELL UP FADE strategy. As it played out, the market respected our level at the R Level and sold off sharply from 7am - 9am. Since our expectation is for price action to stay within the Critical Range, profits could have been realized on this trade at the DP just before 9am.
Today's MARKET STATE for DAX: **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 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 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 DAX
Wrap Up
- Today in the DAX futures market, we had a textbook breakout strategy that performed to our expectations. With a slight negative bias in the NEUTRAL DIGESTION market state, traders should look to get short the market below the R Level. Our market commentary tells us to accept SELL DP BREAKOUT signals, a strategy that is in-line with our sentiment bias. Our expectation on the breakout signal is a move of 2 APMD, in this case, from the DP to the DT2. After finding support at the DP from 4:30-6 am, the market finally broke below the DP signalling traders to get short. The market confirmed the trade immediately with a sharp sell off that took prices all the way down to our DT2 just after 7 am.
Today's MARKET STATE for GOLD: **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 "starts 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 GC
Wrap Up
- Today serves as a perfect example of the power of JS Services Strategy Based Trading approach. The market has produced a BEAR TREND CORRECTION Market State with an MC Value of -2. With the R Level above the UT1, traders should look for a continuation of the BEAR TREND below this level. With that being said, the market has produced a corrective signal and traders should look to get short on any rally below the R. Our market commentary tells us that the SELL UP REVERSAL strategy will work best. After respecting the UP around 5:30am, the market gave us a "head fake" above the UP and quickly sold off back into our Critical Range. This presented traders with the opportunity to execute out SELL UP REVERSAL strategy with the expectation of a resumption in the bear trend. The market sold off sharply after the reversal signal, stabilizing at the DIR briefly before selling off to the DP at 10am where profits could have been realized.
Today's MARKET STATE for SWISS FRANC: **BULL TREND ACCELERATION**
- Technically the MKT is in play after producing a big positive signal. On the SELL side REVERSAL strategies can be executed off the UP and +c. Expectations should be for an immediate exhaustive turn with the MKT quickly moving away from the area. Avoid SELL UP FADE strategies even with confirmation. SELL DP BREAKOUT strategies are not recommended but can be used as a signal for a FADE against the DIR.
- On the BUY side accept FADE, REVERSAL and BREAKOUT strategies above the previous session's low point. UP BREAKOUT strategies should just "go", so do not risk much. Be wary of these strategies early in the session and look to exit on the 1st break in structure. BUY DP FADE strategies are recommended over REVERSAL strategies as the MKT is expected to hold higher structure and any failure should be considered a potential negative corrective shift high.
Today's PRICE MAP Performance for SF
Wrap Up
- Although we didn't get the powerful upside rally that we were looking for in a BULL TREND ACCELERATION Market State, there was still opportunity for profits in the AUSTRALIAN DOLLAR. As the market sold off during the overnight session, it provided traders with a prime opportunity to get long the market from the optimal entry point, the R Level. The BUY R FADE strategy could have been executed at either 6 am or 7:30 am, with the expectation of upside follow through. As it played out, the market was only able to rally up to the DIR before putting in an intraday double top around the 1.1030 level, signalling traders to take profits on their long positions.
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
- With a MC Value of +2 the WHEAT market has a slight positive tone in a NEUTRAL Primary Technical State. With the R Level being placed at the minor level below the DP the analyst is "expanding the Critical Range". If the DP is breached, the breaking point for the positive Sentiment for the session is at the R Level. The market sold off sharply from the DIR, took out the DP and eventually found Support at the R Level. This presented traders with an opportunity to get long from the R with the expectation that market would retrace back into the Critical Range. As it played out, the low for the day was right at our R Level, allowing traders to enter long the market at the optimal entry point and ride the trade all the way up to the DIR, where profits could have been realized around 11:30 AM. By identifying the market state expectations as well as the key inflection point for the session, traders were able to successfully navigate the choppy price action in the WHEAT futures market.
