DOW JONES FUTURES INDEX

Today's MARKET STATE for DOW JONES FUTURES INDEX: **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 DF

 

Wrap Up
-Today, the DOW JONES FUTURES INDEX was in a "Neutral Digestion" state and our expectation is for a sideways trading day.  With an MC Value of -1 and the R Level at the UT1, there is a negative bias to today's price map.  The DF had an early rally that broke out of the Critical Range around 6:30 A.M.  This move signaled to the trader that a new digestive range was being established.  Since the R Level was placed at the UT1, the analyst is telling the trader that the market has the potential to breakout of the critical range, but the probability favors a failure to surpass the UT1.  As it played out, the market did indeed fail from the R Level, and presented the trader with the highest probability trade of the day, a "Sell R Fade".  From here the market began to retrace its progress, giving the trader an opportunity to realize profits at the UP around 10 A.M.  The market again failed from the R Level around 2 P.M. which would have provided the trader with another opportunity to Sell the R Level for a profitable trade.

S&P 500 INDEX

Today's MARKET STATE for S&P 500 INDEX: **BULL TREND CORRECTION**

- The MKT has a soft tone against an underlying positive trend. On the SELL side accept UP FADE signals on the 1st or 2nd 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 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 SP

Wrap Up
-The S&P 500 Index has produced a negative signal in an underlying positive market for today.  The "Bull Trend Correction" state with the R Level at the UP tells the trader that the underlying trend is positive; however, today's opportunity is on the short side of the market, below the Sentiment Bias.  The market had a brief rally above the DIR, but failed to hold structure above that level.  From here, the market sold off to the DP, digested for a brief period, and then presented the trader with a "Sell DP Breakout" opportunity around 10:45 A.M.  Although this strategy is aggressive, it proved to be the right one, and the beginning of a corrective move lower.  The underlying tone of the market must be respected in this Market State, and tight position management must be implemented.  The Breakout from the DP continued, virtually uninterrupted, to the DT1, which presented a good opportunity for realizing profits.

GOLD

Today's MARKET STATE for GOLD: **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 GC

Wrap Up
-The R Level in the Gold price map worked to perfection today.  The market was in a "Neutral Digestion" state, so our expectation is for a sideways trade within the Critical Range.  With that being said, the placement of the R level at the minor level below the DP is significant.  By doing this, the analyst is telling the trader that the digestive range has been extended, and any negative reaction is capable of taking prices down to the R level.  In this market state, we recommend a "Buy DP Reversal" strategy, which is in agreement with the Sentiment Bias for the day (R Level).  The price dropped down to the R level around 7:30 A.M., immediately reacted back to the DP, retested the R level and then proceeded to rally back through the DP around 8:00, presenting the "Buy DP Reversal" strategy which was validated by the placement of the R below the DP.  From here price rose steadily throughout the morning, testing the DIR a little after 11:00 A.M.  Since our market state is calling for a digestive trading day, profits should be taken sooner rather than later, and the move up to the DIR presented the trader with an opportunity to take profits on a well-executed trade.

EURO CURRENCY

Today's MARKET STATE for EURO CURRENCY: **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 EU

Wrap Up
-The EURO CURRENCY performed to expectations today.  There was an early test of the DIR which presented the opportunity for a "Sell DIR Fade" strategy below the R level.  The market came down to the DP, held support for a short period of time, and then broke below the DP, presenting a "Sell DP Breakout" opportunity.  The break below the DP was significant because it signaled a breakout from the "Critical Range" and implied that price was transitioning lower, which indeed was confirmed when the price made new lows below the DT1.

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http://progressive.powerstream.net/008/00102/edu/interactive/js_services/strategy_based_trading/index.html

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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.

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.