Today's MARKET STATE for S&P500: **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 SP
Wrap Up
- Today in the S&P 500 futures market, our optimal hedge strategy proved effective as the market broke out of its digestive posture and hosted a major sell off. Our optimal hedge strategy in a NEUTRAL DIGESTION market state is a SELL R BREAKOUT strategy. The yellow circle / arrow highlights the MA crossover that signals traders to accept the SELL BREAKOUT signal. Also, it is important to note the negative structure being built throughout the entire session. Just after 10:30 am CT, traders are given the SELL R BREAKOUT strategy. This trade is validated around noon when the market puts in a LOWER move high that fails to trade above the R Level. Our expectation for this trade is for a move to the DT2. The market sold off sharply this afternoon, allowing traders to close out their shorts around 2:30 at the DT2 profit target.
Today's MARKET STATE for CANADIAN DOLLAR: **BEAR TREND**
- 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 CD
Wrap Up
- The MC Value of -7 identified a strong BEAR TREND Market State in the CANADIAN DOLLAR today. With the R Level at the UP, traders should look to get short the market below this level. In these TRENDING states, the Moving Average crossover tactic works well and helps confirm the negative tone of the market. The market bounced off the UP at 4:30 am indicating that this was a level of structural support. After the MA cross occured at 7 am followed shortly after by the breakout below the DP, traders should have accepted this SELL DP BREAKOUT strategy with a profit target at the DT2. The market had a "knee-jerk" correction around 7:30 that failed below the DP and then continued lower, stabilizing at the DT1 and ultimately attaining our downside target at the DT2 around 8:30 am CT. By identifying the technical state of the market and which tactics are most applicable in that state, our traders were able to capitalize on the big sell off in the CD market today.
Today's MARKET STATE for NASDAQ 100: **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 trades. SELL DIR and 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 ND
Wrap Up
- Today in the NASDAQ 100 futures market we had an impressive follow through on the CORRECTIVE signal. Our market commentary tells us that SELL UP BREAKOUT strategies are aggressive; however, they do have the potential to be the start of the next move lower. Using our MA crossover tactic, along with the appearance of a strong bar with a lower close through our key area of support at the DP, the market is telling us to accept the SELL DP BREAKOUT strategy. This strategy proved successful as the market continued to make new lows, eventually making it down to our target area around the DT2 just after 1 pm CT.
Today's MARKET STATE for AUSTRALIAN DOLLAR: **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. Avoid DP FADE BUYS as the negative trend remains in force.
Today's PRICE MAP Performance for DA
Wrap Up
- With an MC Value of -5, our expectation is for a follow through of the BEAR TREND signal in the AUSTRALIAN DOLLAR. For our overnight traders, a SELL R FADE opportunity presented itself just after midnight. The MOVING AVERAGE CROSS occurred at 1 am CT and remained valid throughout the entire session as the market continued to build NEGATIVE STRUCTURE (lower lows and lower highs) throughout the day. Just after 6 am CT, the market gave us a SELL DP BREAKOUT opportunity with an expected move down to the DT 2. The market sold of from 8-9:30, stabilized for a bit at the DT 1, and then continued down to our profit target at the DT 2. By using the Moving Average cross and the markets ability to maintain negative structure, traders were able to net serious profits today.
Today's MARKET STATE for S&P 500: **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 SP
Wrap Up
- Today in the S&P 500 futures market, there was an MC Value of +3 producing a positive tone in a NEUTRAL DIGESTION Market State. With such a positively skewed MC Value (+3), the market is prone to transitioning into a BULL TREND. In order to identify if this is happening, traders must use certain MARKET TACTICS to identify if the market is indeed going to follow through on a BREAKOUT above the UP, or if it is just producing an emotional "head fake". A Moving Average crossover system can help identify when a market is trending and serve as a "filter" for accepting BUY or SELL strategies. While trading above the R Level, the faster MA crosses above the slower MA around 7 am CT. This MA crossover tells traders that BUY strategies are valid. Our second "tell" is that the market produced a STRONG BAR breakout through the UP. These powerful bars serve as confirmation of the strength of the market move. This confluence of MA crossover and STRONG BAR signals provided us with the confidence to accept the BUY UP BREAKOUT strategy and ride the market all the way up to our UT1.
Today's MARKET STATE for AUSTRALIAN DOLLAR: **BEAR TREND**
- 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 DA
Wrap Up
- With an MC Value of -5 and a BEAR TREND Market State, the expectation for the session is for a follow through in the BEAR TREND signal below the R Level. The market respected the R Level on two separate occasions during the overnight session before starting to sell-off gradually. Notice too, the 26 period SMA has crossed from above to below the 50 period SMA, signaling traders to look to accept SELL signals. At 6:30 am CT, the market produces a SELL DP BREAKOUT strategy, in line with our Sentiment Bias as well as our Moving Average crossover tactic. After falling through the DP, the market rallies and tries to trade back within the Critical Range with no success. The market begins to sells off, stabilizing at the minor level 1.0301, before moving down to the DT1 and eventually the second minor level at 1.0271.
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
- Today the R Level proved to be the key inflection point in the DOW FUTURES market. In a BULL TREND market state, our expectation is that any corrective sell off above the R Level is an opportunity to get long the market. The market sold off sharply in the overnight session and allowed traders to get long the market from the R Level with a BUY R FADE strategy at 5:30 am. The market rallied back into our Critical Range and eventually made it up to our DIR at 10 am, allowing traders to trade profits on the trade.
