MKTstate

Wednesday, May 26, 2010

CRUDE OIL Futures - CORRECTIVE SIGNAL

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a big positive signal against a negative trend. Opportunity exists on both sides of the MKT, however the positive signal will remain in play above the 70.23 Inflection Pivot.

On the SELL side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the negative momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies at the 72.17 resistance pivot, which should have at least 1 if not 2 challenges to the integrity of the resistance before executing a sale against it. BREAKOUT strategies below 70.23 can risk a little more if current events and other MKTs of confluence confirm a negative posture. If not a better approach would be to FADE a positive "squeeze" reaction after a negative breakdown signal against the 71.20 Directional as the neutral technical position can keep the trend sideways.

On the BUY side avoid FADE strategies off 70.23 until after the previous session high point or major resistance level has been taken out to confirm a positive shift in momentum. REVERSAL strategies should be avoided as any negative signal is more likely an indication that the underlying trend is going to resume. BUY BREAKOUT strategies above 72.17 can be profitable but they are aggressive and should look to take profits and potentially REVERSE short at resistance targets. The trade is counter trend so avoid any positive commitments.

Note: The MKT has produced a big technical signal against the current trend. Be aware that the positive action may be a 1-day event with the negative trend quickly re-establishing itself. If the MKT is really going to turn it should remain firm and not look back.

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Tuesday, May 25, 2010

5yr T-Note Futures - Sentiment Shift

The MKT is pressing into an exhaustive extreme and is vulnerable to a corrective trade. Respect positive structure but be ready to roll with any negative turn.

Key off the 117-215 Inflection Pivot today for an indication of the session tone. If the MKT is going to avoid a sentiment shift it will maintain a trade above here. If not a sharp negative shift is expected.

On the Sell side REVERSAL strategies off major inflection points will work best as any unsustained positive signal is expected to provide a sharp negative reaction. FADE strategies off the 118-017 resistance inflection pivot is valid but will work better after the 2nd or 3rd press into an area. BREAKOUT strategies below 117-215 are a lower probability but do have the potential to provide an emotional release.

On the Buy side FADE and REVERSAL strategies are recommended off 117-215, especially if the previous session low point remains intact. BREAKOUT strategies above 118-017 should hold structure after a resistance breach if they are going to follow through. Any break in momentum and the market will be vulnerable to drop back into a digestive trade.

Note: The MKT has stalled and may need a session or two to catch its breath or it already has. Keep an open mind and let the MKT tell you was is.

Monday, May 24, 2010

EURUSD Forex - EDGE OF THE ENVELOPE

Technically the MKT is in a NEUTRAL TRANSITION with sentiment leaning negative and flirting with a negative turn. Opportunity exists on both sides of the equation however the threat of an acceleration of the negative momentum outweighs the buy side if the integrity of the previous session high remains intact.

Key off the 12297 Inflection Pivot for an indication of the session tone. If the MKT is going to remain stable it will not do much trading below here. If so the negative momentum is expected to dominate.

On the SELL side accept BREAKOUT, FADE and REVERSAL strategies with the expectation that the current positive to negative transition will continue. Keep aggressive position management on BREAKOUT strategies below 12297 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 into against 12373. The trade should be fluid with the MKT immediately giving background after any positive squeeze. 12449 is the high point for any positive squeeze if the negative signal is going to play out and FADE and REVERSAL signals should be excepted.

On the BUY side avoid FADE strategies of the 12297 support area until after the previous session high point or major resistance has been taken out to confirm a break in momentum. Until then a better opportunity will be a REVERSAL strategy but only off 12297. This is a one shot trade using a low risk big profit target criteria. The idea is that the transition trade is over and a positive shift back into a NEUTRAL DIGESTION is expected. BUY BREAKOUT strategies above 12449 can be profitable but they are aggressive and should use the same aggressive position management as a REVERSAL. Risk less go for more.

Note: The MKT is trying to shift from a positive to a negative trend position. False starts and stops should be expected and position management adjustment anticipated, as quick momentum turns are the norm in this technical environment.

DAX Futures - MIXED SIGNALS

Technically the MKT is in a BEAR TREND ACCELERATION position and is vulnerable to the offer. Any positive corrective action is expected to be short lived with only one upside "stop squeeze" if the negative moemtnum is going to play out. Any held strength and repeated probe higher is a sign that the trade will turn digestive. This does not take away from the negative bias but does limit the profit potential for any new sales in the session.

Key off the 5949 Inflection Pivot today. This is the top the market's BEAR TREND structure and the high point for any upside squeeze if the negative signal is going to retain its influence.

On the SELL side accept FADE, REVERSAL and BREAKOUT strategies below the 5949 level. BREAKOUT strategies below 5812.5 should just "go", so do not risk much. FADE strategies are recommended over REVERSAL strategies at 5881 and 5949 as the MKT is expected to hold lower structure and any momentum shift should be considered a potential positive corrective turn.

On the BUY side avoid REVERSAL strategies off major support levels as these signals are more likely short squeeze rallies and opportunities to SELL into and FADE. BREAKOUT strategies above 5881 and 5949 are a long shot, so risk less and go for more. Any BUY FADE off the 5812.5 support pivot should have confirmation and are not recommended if the integrity of the previous session high is intact. After a break in the negative structure confirmed support levels can be used for short term reactions using aggressive position management.

Note: The MKT is in an aggressive sell posture. If the previous session high is intact its just a matter of time before the sellers try to overwhelm the MKT. Look for excuses to get short. If the previous session high is breached opportunity will be on both sides of the MKT, however the bias still rests with the Bears.

Thursday, May 20, 2010

RUSSELL 2000 Futures - SET TO SWING

Technically the MKT is in a NEUTRAL DIGESTIVE position with a slight negative bias. Opportunity exists on both sides of the MKT but "choppy" sideways trading conditions should be expected.

Key off the 660.30 Inflection Pivot for an indication of the session tone. This is the high point for any positive action if the contract is going to remain vulnerable to the offer.

On the SELL side BREAKOUT strategies below 627.90 are valid but should expect a laborious trade. Work any position, covering on emotional sell-offs and re-entering on any sharp pullbacks. Expect a choppy trade and be aggressive on minimizing profit give-back. FADE and REVERSAL strategies are recommended off major resistance levels. The probability is to the downside today but is not a day to press it.

On the BUY side avoid BREAKOUT strategies above 660.30 but rather FADE a negative reaction after a positive breakout signal at 644.10. REVERSAL strategies are recommended over FADE strategies off major support inflection points as "sloppy" trading conditions are expected. Any FADE trades at the 627.90 support pivot should get confirmation or a negative exhaustion or turning point signal before executing. Position management adjustments should be anticipated for all longs as sideways trading conditions can quickly erase profits.

Note: The MKT is in neutral and is more likely to go nowhere fast. Don't get stubborn however if the MKT starts to get into trend mode as the contract may just be expanding its digestive parameters producing a one way trade into the close and new extreme.

Wednesday, May 19, 2010

GOLD Futures - HOW'S THAT LEVERAGE FEEL NOW?

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a negative signal against a positive trend. Opportunity exists on both sides of the MKT.

Key off the 1212.80 Inflection Pivot for an indication of the session tone. Below here yesterday's negative signal remains in play.

On the SELL side avoid FADE strategies against 1207.2 and 1212.8 until after the previous session low point or major support level has been broken to confirm a negative shift in momentum. Until then a better opportunity will be a REVERSAL strategy but only off the 1st major resistance level. This is a one shot trade using a low risk big profit target criteria. The idea is that if the MKT is going to follow through on its negative signal any strength is just a "head fake " before it follows through. SELL BREAKOUT strategies below 1185.6 can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is corrective and the underlying positive tone must be respected.

On the BUY side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the positive momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies off the 1185.6 support pivot, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies above 1212.8 can risk a little more if current events and other MKTs of confluence confirm a positive posture with the expectation that the Bull Trend is going to resume. If not a better approach would be to FADE a negative "squeeze" reaction after a positive breakout signal at 1196.9 as the neutral technical position can keep the trend sideways.

Note: The MKT is in a corrective position with the potential to move in either direction. Keep your opinions to themselves and focus on what the MKT is telling you it wants to do. Don't fight it, roll with it.

Tuesday, May 18, 2010

NAT GAS Futures - TRYING TO MAKE A DIFFERENCE

Technically the MKT has produced a major positive technical signal which remains in play with all trading above the 4.252 Inflection Pivot. A higher close today will confirm the signal and have the potential to influence the trade for the next 3-8 days.

On the SELL side BREAKOUT strategies below 4.252 are very aggressive and should be executed higher than lower. Expectations should be that yesterday's positive signal was exhaustive and a sharply lower reversal signal is due. Don't take the signal otherwise as any setback should be looked at as a buy opportunity. If the MKT is going to turn sour, it should be quick and relentless. Avoid FADE strategies against 4.492 as the MKT has just produced a major buy signal and fresh gains are expected. REVERSAL strategies as well are not recommended, as any resistance level violation that cannot be held is more likely a squeeze for the longs, which can quickly turn positive. The SELL side today is a dangerous place to be.

On the BUY side BREAKOUT, FADE and REVERSAL are recommended as the MKT is aggressively 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, leverage up using the squeeze low as a stop, expecting a quick reaction back above your original entry. If so stay with the position with the expectation of a play for new move highs. Look for pportunity off 4.252, 4.372 and 4.492.

Note: The MKT has produced a significant positive technical signal that has the potential to produce a fundamental shift in sentiment. Expectations are for steady gains after at most, one pullback. A laborious trade and the MKT may wait till the end of the session to make its move.