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Identifying MARKET STATE, STRUCTURE and STRATEGY solutions
Wednesday, July 18, 2012
GBPUSD
Today's MARKET STATE for GBPUSD: **NEUTRAL POSITIVE SHIFT**
-The market has produced a positive signal against underlying negative momentum. The sentiment bias R Level at the upper Critical Range extreme UP [UPSIDE PIVOT] is an indication that the positive signal is suspect and is expected to “exhaust” at the UP R Level. This price inflection point represents a “hard” lid to the corrective signal. If the market is indeed going to revert to a soft sideways trade it will reject here. A BREAKOUT however will confirm the positive signal and is expected to provide a “pop” into a higher trade the UT1 [UPSIDE TARGET #!] the minimum target. Don’t fight positive structure above the R Level as it does have the potential to be the start of a transitional trade north. SELL FADE opportunities against the UP R are a better opportunity than a REVERSAL as this level is expected to maintain its integrity if the trade is going to sour. Initiate sales sooner than later on any negative momentum shift as the NEUTRAL nature of the trade state will limit any extended TREND move.
Today's PRICE MAP Performance for GBPUSD
Wrap Up
-Today's move was presented to us early in the session. There was a small pop around 3 A.M. which failed from the DIR setting up a "Sell DIR Fade" strategy. The price fell off sharply, rebounding off of the DP, and eventually breaching the DP around 5 A.M. From here we saw a reaction back to the DP, and the rest of the day took on a gradual advance back toward the DIR.
-The market has produced a positive signal against underlying negative momentum. The sentiment bias R Level at the upper Critical Range extreme UP [UPSIDE PIVOT] is an indication that the positive signal is suspect and is expected to “exhaust” at the UP R Level. This price inflection point represents a “hard” lid to the corrective signal. If the market is indeed going to revert to a soft sideways trade it will reject here. A BREAKOUT however will confirm the positive signal and is expected to provide a “pop” into a higher trade the UT1 [UPSIDE TARGET #!] the minimum target. Don’t fight positive structure above the R Level as it does have the potential to be the start of a transitional trade north. SELL FADE opportunities against the UP R are a better opportunity than a REVERSAL as this level is expected to maintain its integrity if the trade is going to sour. Initiate sales sooner than later on any negative momentum shift as the NEUTRAL nature of the trade state will limit any extended TREND move.
Today's PRICE MAP Performance for GBPUSD
Wrap Up
-Today's move was presented to us early in the session. There was a small pop around 3 A.M. which failed from the DIR setting up a "Sell DIR Fade" strategy. The price fell off sharply, rebounding off of the DP, and eventually breaching the DP around 5 A.M. From here we saw a reaction back to the DP, and the rest of the day took on a gradual advance back toward the DIR.
Tuesday, July 17, 2012
EURUSD
Today's MARKET STATE for EURUSD: **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 EURUSD
Wrap Up
-Today we had an emotional sell off from the DIR. A "Sell DIR Breakout" strategy would have worked well as the sell off took the market all the way down to the DP with very little hesitation. Following the emotional sell off, price rallied back above the DP, creating a "Buy DP Reversal" opportunity, which continued through the DIR.
-Today we had an emotional sell off from the DIR. A "Sell DIR Breakout" strategy would have worked well as the sell off took the market all the way down to the DP with very little hesitation. Following the emotional sell off, price rallied back above the DP, creating a "Buy DP Reversal" opportunity, which continued through the DIR.
Monday, July 16, 2012
SP500 U'12
TECHNICAL STATE: #NEUT - NEUTRAL DIGESTION TRANSITION
The market in a NEUTRAL DIGESTION TRANSITION has typically been in a NEUTRAL market state for at least 3 trading periods and is ready to make a decisive move out of it’s “range” trade. This is a “pivotal” trading period with the potential to be the start of the next significant advance or decline. This Technical State can present difficult trading conditions with false signals in both directions common. The MKT is gearing up for a move and will either continue to narrow its recent trading range or “bust” out into a new trend. Opportunity exists on both sides of the market, however aggressive risk management should be implemented. REVERSAL and BREAKOUT strategies are recommended over fading momentum. Successful BREAKOUT strategies under these conditions are typically “one-shot” opportunities, using aggressive trail stops.
TECHNICAL STATE: #NEUT - NEUTRAL DIGESTION TRANSITION
The market in a NEUTRAL DIGESTION TRANSITION has typically been in a NEUTRAL market state for at least 3 trading periods and is ready to make a decisive move out of it’s “range” trade. This is a “pivotal” trading period with the potential to be the start of the next significant advance or decline. This Technical State can present difficult trading conditions with false signals in both directions common. The MKT is gearing up for a move and will either continue to narrow its recent trading range or “bust” out into a new trend. Opportunity exists on both sides of the market, however aggressive risk management should be implemented. REVERSAL and BREAKOUT strategies are recommended over fading momentum. Successful BREAKOUT strategies under these conditions are typically “one-shot” opportunities, using aggressive trail stops.
If the
market is going to “go” it should continue to hold structure. If not a REVERSAL
back into a messy sideways trade should be expected.
Thursday, July 12, 2012
SP500 U'12 - SET FOR SIDEWAYS
TECHNICAL STATE:
#NEU - NEUTRAL DIGESTION
Technically the MKT is in a NEUTRAL
DIGESTIVE position with all indicators counter balanced. The MKT is "on
the fence" with the potential to go either direction or nowhere. Pick your
points and have no expectations. In this market state directional moves are not
expected to be sustained. Opportunity exists on both sides of the market,
albeit profit potential is limited and should be realized “sooner than later”.
Markets that do end a session with a strong directional bias will have trouble
sustaining that bias in the coming session, without the support of a like shift
in the next session’s MC Value.
SENTIMENT BIAS: NEGATIVE – R=UT1
Optimal
Strategy = BUY DP REVERSAL; SELL R FADE; SELL UP REVERSAL
Hedge
Strategy = BUY R BREAKOUT: SELL DIR CR BREAKOUT
OPTIONS ANALYSIS
Neutral Digestion markets offer an opportunity to cautiously sell some option premium. Caution is warranted as the Neutral Digestion state can be a precursor to a breakout as the coiling action will build power. There is a negative sentiment bias but directional moves are not expected to be sustained. A breakout to the downside will bring higher volatiles.
Wednesday, January 4, 2012
CRUDE OIL - POSITIVE EXTREME
TECHNICAL STATE: #PE - POSITIVE EXTREME
A market in a POSITIVE EXTREME signature state is in extended to the upside. In this market state emotional trading conditions are expected with greed the overwhelming factor. Opportunity exists on both sides of the market with the likely-hood of a sideways session high. If the MKT maintains positive higher move high higher move low structure don't fight it as it is best not to "underestimate" the influence greed can have in a euphoric price move. Keep leverage light and be ready to roll as it is typically for exhaustive tops to be made on an "offer" and not look back. The best SELL REVERSAL opportunities in this trade state happen early in the session after a false upside BREAKOUT and can be the precursor to a sustained CORRECTION or TREND REVERSAL.
A market in a POSITIVE EXTREME signature state is in extended to the upside. In this market state emotional trading conditions are expected with greed the overwhelming factor. Opportunity exists on both sides of the market with the likely-hood of a sideways session high. If the MKT maintains positive higher move high higher move low structure don't fight it as it is best not to "underestimate" the influence greed can have in a euphoric price move. Keep leverage light and be ready to roll as it is typically for exhaustive tops to be made on an "offer" and not look back. The best SELL REVERSAL opportunities in this trade state happen early in the session after a false upside BREAKOUT and can be the precursor to a sustained CORRECTION or TREND REVERSAL.
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