|
*** QUALIFIERS = R, UP, DP, DIR, UT, DT
** QUALIFIERS = ** * QUALIFIERS = CR, CRX, * When the R value is EQUAL with the UP pivot we are in a BEAR trend." BEAR STATE -- A BEAR TREND signature state is typified by a market that continues to make lower move lows and lower move highs or negative structure. As long as the market continues to hold structure, further losses should be expected. This does not mean there cannot be corrective pull-backs but rather any positive price action is expected to exhaust below the high inflection point that will maintain structure. Any violation of this resistance point or break in the negative structure is more likely to produce a NEUTRAL shift rather than a POSITIVE TRANSITION. If the MKT has been trading on the offer all session but has not been able to follow through on any negative breakout, beware of a corrective squeeze into the close. Typically a strong price move at the end of the session will be followed by weakness in the new trade period.If the MKT is going to trend lower, it will demonstrate that with negative intraday price structure. If not, a weak digestive trade is the outlook." BEAR STRUCTURE -- A market in a BEAR TREND signature state with the R LEVEL equal to the UP (UPSIDE PIVOT) defines the upper peak of the negative market structure. Trading below the R LEVEL will keep the market vulnerable to a negative trend move. This is the optimal sell area as it has the potential to be the high point for the next reaction lower. Resting FADE and REVERSAL entry strategies are recommended. Size management off lower selling opportunities should be considered to ensure enough firepower if an R LEVEL Sell opportunity is presented. With the R LEVEL above the market, a worst case scenario is when the MKT breaks out to the downside (below the DP- DOWNSIDE PIVOT) early in the session and then has a low volatility rally all day closing at or near the R LEVEL. Recognizing this momentum shift early can produce a nice counter trend opportunity. In addition, a BREAKOUT above the R LEVEL has the potential to trigger a counter trend corrective rally. Don’t fight positive structure above here hoping for an exhaustive turn." BEAR STRATEGY -- Technically the MKT is a BEAR TREND with SELLing energy centered at the UP R LEVEL. Use a SELL R FADE in conjunction with a SELL UP REVERSAL to SELL into any strength as this has the potential to be the peak for the next leg lower in the BEAR TREND. A trade under the CR+ will validate the signal and can be a good spot to add to any short position. A SELL DIR BREAKOUT is a valid strategy and does confirm the MKT weakness. Avoid overleveraging with this or a SELL DP BREAKOUT as the optimal SELL entry is at or near the UP R LEVEL. Once the MKT starts trending lower it should continue to do so. A SELL DP BREAKOUT confirms a new extension lower and if its true the MKT will maintain a trade below the DP after a failure. If not and the MKT breaks structure trading back above the DP it can be a signal that the trade will turn digestive. Use a BUY DP REVERSAL to capture a bounce back into the CriticalRange. If this signal happens early in the session the trade vision should be for a rally back up to the UP R LEVEL. If later in the session the DIR should be anticipated to reject the advance. A BUY R BREAKOUT strategy signals that the BEAR TREND is over and the MKT is in transition.Ride positive price and market structure and avoid any sales above the UP R LEVEL. Typically the rally will either stall at the UT1(UPSIDE TARGET #1) and fall back into a sideways digestion or it will rally into the close targeting the UT2 (UPSIDE TARGET #2). Note: Technically the MKT is in a negative trend with sentiment supporting the state condition and the likelihood of the MKT trading lower high. In this state and structure it is easy to get overleveraged early below the DIR only to be squeezed later in the session for a test of the UP R LEVEL. Be prepared for a test of the UP R LEVEL at some point in the session and incorporate proper size management." The R LEVEL >UT1 but also above the UP SIGNATURE STRUCTURE -- A market in a BEAR TREND signature state with the R LEVEL above the UT1 (UPSIDE TARGET#1) is vulnerable to the negative momentum up to the R LEVEL. This is the optimal sell zone. Rallies up to this inflection point are expected to exhaust. Size management at lower selling opportunities should be considered to ensure enough firepower if this opportunity is presented. With the R LEVEL above the market, a worst case scenario is when the MKT breaks out to the downside (below the DP-DOWNSIDE PIVOT) early in the session and then has a low volatility rally all day closing at or near the R LEVEL. Recognizing this momentum shift early can produce a nice counter trend opportunity. SIGNATURE STRATEGY -- Technically the MKT is a BEAR TREND with the potential for a rally up to the R LEVEL. Don't lose site that the underlying trend is down. BUY signals should incorporate smaller position size and duration, SELL signals larger size and longer duration. The optimal SELL entry is at the R LEVEL as this area has the potential to be the peak for the next leg lower in the BEAR TREND. Use a SELL R FADE and SELL UP REVERSAL strategy in conjunction to capture this opportunity. A breach of the R LEVEL negates this opportunity and is more likely to produce a digestive that positive transition. A SELL DIR BREAKOUT can be used to add to any short position. Use proper size management and avoid overleveraging. The MKT should begin trending lower below the DIR and stair step down the PriceMap framework. A SELL DP BREAKOUT is valid but not that interesting as the real SELLing energy is above the market. The key to the persistence of the BEAR TREND is the MKT holding negative structure. A break in structure and a corrective trade back up to the R LEVEL should be anticipated. Use the BUY DP REVERSAL and BUY DIR BREAKOUT to capture a corrective turn. The BUY DIR BREAKOUT strategy can be used on its own to participate in a corrective rally up to the R LEVEL. Typically the best opportunity an early session which sets up a SELL R FADE. Note: Technically the MKT is in a negative trend with sentiment supporting the state condition confirming a SELL strength Market Structure Bias (MSB). There is the potential for a counter trend signal and it is easy to get overleveraged early below the DIR only to be squeezed later in the session when the MKT makes a play for the R LEVEL. Be prepared for a test of the R LEVEL at some point in the session and incorporate proper size management. The R LEVEL equal to the CR+ NEUTRAL STATE -- This does not mean there cannot be corrective pull-backs but rather any positive price action is expected to exhaust below the high inflection point that will maintain structure. Any violation of this resistance point or break in the negative structure is more likely to produce a NEUTRAL shift rather than a POSITIVE TRANSITION.If the MKT has been trading on the offer all session but has not been able to follow through on any negative breakout, beware of a corrective squeeze into the close. Typically a strong price move at the end of the session will be followed by weakness in the new trade period.If the MKT is going to trend lower, it will demonstrate that with negative intraday price structure. If not, a weak digestive trade is the outlook. The R LEVEL equal to the CRX+ STATE BEAR TREND -- A BEAR TREND signature state is typified by a market that continues to make lower move lows and lower move highs or negative structure. As long as the market continues to hold structure, further losses should be expected. This does not mean there cannot be corrective pull-backs but rather any positive price action is expected to exhaust below the high inflection point that will maintain structure. Any violation of this resistance point or break in the negative structure is more likely to produce a NEUTRAL shift rather than a POSITIVE TRANSITION. If the MKT has been trading on the offer all session but has not been able to follow through on any negative breakout, beware of a corrective squeeze into the close. Typically a strong price move at the end of the session will be followed by weakness in the new trade period. If the MKT is going to trend lower, it will demonstrate that with negative intraday price structure. If not, a weak digestive trade is the outlook. STRUCTURE BEAR TREND -- A market in a BEAR TREND signature state with the R LEVEL above the UP (UPSIDE PIVOT) creates a resistance band which defines the upper peak of the negative market structure. Trading below the R LEVEL will keep the market vulnerable to a negative trend move. This is the optimal sell zone. Rallies into this area are expected to exhaust. Size management off lower selling opportunities should be considered to ensure enough firepower if an R LEVEL Sell opportunity is presented. With the R LEVEL above the market, a typical Hedge scenario is when the MKT breaks out to the downside (below the DP- DOWNSIDE PIVOT) early in the session and then has a low volatility rally all day closing at or near the R LEVEL. Recognizing this momentum shift early can produce a nice counter trend opportunity. STRATEGY BEAR TREND -- Technically the MKT is a BEAR TREND with SELLing energy focused at the UP R LEVEL price band. Keep a SELL strength outlook below here. Use a SELL R FADE and SELL UP REVERSAL strategy in conjunction to capture an optimal opportunity which is to SELL the peak of the next reaction lower. A breach of the R LEVEL negates this opportunity. Don’t get caught leveraging up on a BUY R BREAKOUT as it is more likely that the move is just a squeeze and not a transition into a positive Market State. Typically MKT will range trade with the CR+ or DIR being the new digestive low. A SELL DIR BREAKOUT can be used to add to any short position. Use proper size management and avoid overleveraging. The MKT should begin trending lower below the DIR and stair step down the PriceMap framework. A SELL DP BREAKOUT is valid but only the minimum amount of leverage applied. Anticipate positive reactions off support levels but maintain a negative outlook as long as the MKT is holding negative structure. A break in structure and a corrective trade back up to the UP-R LEVEL range should be anticipated. Use the BUY DP REVERSAL and BUY DIR BREAKOUT to capture a corrective turn. Note: Technically the MKT is in a negative trend with sentiment supporting the state condition and the likelihood of the MKT trading lower high. In this state and structure it is easy to get overleveraged early below the DIR only to be squeezed later in the session for a test of the UP R LEVEL range. Be prepared for a test of the UP R LEVEL at some point in the session and incorporate proper size management. The R LEVEL equal to the DP NEGATIVE BIAS TRANSITIONAL STRUCTURE -- The R LEVEL equal to the DP (DOWNSIDE PIVOT) questions the viability of the current BEAR TREND and puts the market in play. The R LEVEL in this position is basically saying prove it to me .If the market is truly trending lower, it should fail from the DP R LEVEL and not look back. Expectations are that any SELL BREAKOUT signal should be made with emotion, triggering a sharp drop and followed by a one way trade into the close.If the BREAKOUT lower scenario does play out, it has the potential to influence the market for the next 3-5 sessions. Trading above the DP R LEVEL however is expected to be digestive in nature up to the UP (UPSIDE PIVOT).This is the true test of the negative trend’s intentions. If the market creates a lid here, it is a sign of weakness for an eventual resumption of the lower move low campaign.A BREAKOUT above the UP with the current positive sentiment bias is more likely a positive transition than a shift into a NEUTRAL state. TRANSITIONAL STRATEGY -- Technically the MKT is a BEAR TREND but sentiment is below the market at the DP putting the negative momentum in a questionable position. There is opportunity on both sides but the potential for a corrective rally is real above the DP R LEVEL up to the UP (UPSIDE PIVOT).The UP defines the structure high point keeping the BEAR TREND intact. Use a SELL R FADE to fade strength anticipating a break down to the R LEVEL. A SELL DIR BREAKOUT strategy can be used to add to any short position however the nature of this structure bias is for stop and go trading so use low leverage anticipating the MKT to stabilize above the DP R LEVEL support band. Only below here does the BEAR TREND engage forecasting a new trend move south. Use a SELL DP BREAKOUT strategy capture a new extension lower. A BUY R FADE is not recommended as the underlying negative trend must be respected. A better option is to wait for a break in structure after an exhaustive downside event to produce a BUY signal. A BUY DP REVERSAL is a good strategy to identify this and capture the start of a transitional shift. The DIR is the litmus test for the BUY DIR REVERSAL which will validate the positive signal or bring in new SELLers and return of the BEAR TREND. If the trend is going to persist the MKT will reject in front of the DIR.A breakout above the DIR confirms the positive transition. Use a BUY DIR BREAKOUT to jump on a momentum shift and ride it until positive structure is broken. A BUY UP BREAKOUT if triggered confirms a positive transition and the potential for a multi session advance. Note: The MKT is in a BEAR TREND but with the R LEVEL below the market at the DP it puts the lower outlook in question and the likelihood of a sideways trade high. If the MKT trade below the DIR is should stay below the DIR, trend lower and breakout below the DP R LEVEL. If not, it is a tell that the state may be transitioning or set for a non-event sideways session. R LEVEL equal to the DIR DIRECTIONAL STRUCTURE BEAR -- A market in a BEAR TREND signature state with the R LEVEL equal to the DIR (DIRECTIONAL) defines the turning point for the current negative momentum. The market is in play and the R LEVEL will either confirm or deny the current BEAR TREND. If the market is going to continue lower, it should remain hard pressed below this inflection point and just release. A failure from the DP (DOWNSIDE PIVOT) confirms a new extension and is expected to trigger new negative emotion and a sharp drop. A rise above the R LEVEL signals a break in the negative market structure and a shift into a more digestive trade state. Expect difficult conditions with false momentum signals.Only above the UP (UPSIDE PIVOT) is there potential for a corrective turn. DIRECTIONAL STRATEGY BEAR -- Technically the MKT is a BEAR TREND but is currently is currently on the fence to its immediate direction with the focus on the DIR (DIRECTIONAL) R LEVEL. This is an aggressive sentiment posture for the BEAR TREND as the market must maintain a trade below the DIR R LEVEL to maintain negative structure. If so SELLing pressure is expected to build with a failure from the DP (DOWNSIDE PIVOT) the breaking point. Use a SELL R FADE strategy to get on a new negative trend and a SELL DP BREAKOUT to press it. Trade vision is for a 2 APMD move down to the DT2 (DOWNSIDE TARGET #2) A rise above the DIR R LEVEL at any time during the session is a sign of strength that has the potential to be the spark for a positive transition. Don’t fight positive structure above the DIR R LEVEL and avoid any sales above the UP (UPSIDE PIVOT) as the potential for a one-way railroad rally is real. Use a BUY R BREAKOUT to capture this opportunity. The key tell to the success of this strategy is the MKTs ability to hold positive structure or not.The best results come from movement that maintains both positive price and market structure climbing the PriceMap framework. The current structure bias identifies a MKT that is in play and ready to go in either direction. A break in momentum is the signal that the trade will turn digestive. Use a BUY DP REVERSAL and SELL UP REVERSAL strategies to capture a momentum shift back to the DIR R LEVEL. Note: The MKT is in a BEAR TREND with the sentiment bias balanced with the R LEVEL equal to the DIR. This is a dynamic Market Structure Bias (MSB) with good energy for a trend move. The key tell being the MKTs ability to maintain positive or negative structure. If it’s holding, ride it, a break in structure and position for a range trade. DIRECTIONAL STRUCTURE BULL -- A market in a BULL TREND signature state with the R LEVEL equal to the DIR (DIRECTIONAL) defines the turning point for the current positive momentum. The market is in play and the R LEVEL will either confirm or deny the current BULL TREND. If the market is going to continue higher it should remain firm above this inflection point and just go. A BREAKOUT above the UP (UPSIDE PIVOT) confirms a new extension and is expected to trigger fresh interest and provide a nice pop. A break below the R LEVEL signals a break in the positive market structure and a shift into a more digestive trade state. Expect difficult conditions with false momentum signals. DIRECTIONAL STRATEGY BULL --Technically the MKT is in a BULL TREND but is on the fence to its immediate direction. Opportunity exists on both sides of the MKT with the probability bias to the upside. Expectations are for the MKT to show its hand early in the session and play from that direction for the balance of the day or get set for a difficult choppy trade. Use the BUY R FADE and BUY UP BREAKOUT to get on the positive side of the market anticipating a new advance. Incorporate the SELL UP REVERSAL to protect profits and participate in a pull-back down to the DIR. If the positive momentum is going to continue it will stabilize and base above the DIR. If the current session high point is below the CRX+ then the BUY UP BREAKOUT was not validated and the SELL UP REVERSAL will have the potential to turn the MKT. A failure from the R LEVEL is needed to confirm a break in positive structure of the BULL TREND. Use a SELL R BREAKOUT strategy to participate in a sentiment shift. The current market structure bias with the R LEVEL equal to the DIR identifies a market state with high energy which will add fuel to a negative signal generated from a SELL R BREAKOUT. The tell that the MKT is going to follow through is an initial flush that breaks below the CR- and validates the signal followed by successive lower price structure highs. Incorporate the bulk of size allocation on the initial signal with a minimum 2 APMD trade vision. This strategy has the potential to be the initiator of a sustained correction which should not provide another opportunity to get in within the DIR metrics if it is indeed due to turn sentiment. Note: The balanced structure with the R LEVEL equal to the DIR has the BULL TREND at a decision point. The success or failure today will come in recognizing if the MKT is going to move off the fence away from this area or just seesaw around it. SIGINATURE STATE -- A market in a BULL TREND signature state with the R LEVEL equal to the DIR (DIRECTIONAL) defines the turning point for the current positive momentum. The market is in play and the R LEVEL will either confirm or deny the current BULL TREND. If the market is going to continue higher it should remain firm above this inflection point and just go. A BREAKOUT above the UP (UPSIDE PIVOT) confirms a new extension and is expected to trigger fresh interest and provide a nice pop. A break below the R LEVEL signals a break in the positive market structure and a shift into a more digestive trade state. Expect difficult conditions with false momentum signals. Only below the DP (DOWNSIDE PIVOT) is there the potential for a corrective turn. SIGINATURE STATE -- A BULL TREND signature state is typified by a market that continues to make higher move highs and higher move lows or positive structure. As long as the market continues to hold structure, further gains should be expected. This does not mean there cannot be corrective set-backs but rather any negative price action is expected to exhaust above the lower inflection point that will maintain structure. Any failure or break in the positive structure is more likely to produce a NEUTRAL shift rather than a NEGATIVE TRANSITION. A quiet market is likely to turn positive especially later in the trade period. Typically if the MKT is going to trend higher it will demonstrate that with positive intraday price structure. If not a firm digestive trade is the outlook. SIGINATURE STRUCTURE -- A market in a BULL TREND signature state with the R LEVEL equal to the DIR (DIRECTIONAL) defines the turning point for the current positive momentum. The market is in play and the R LEVEL will either confirm or deny the current BULL TREND. If the market is going to continue higher it should remain firm above this inflection point and just go. A BREAKOUT above the UP (UPSIDE PIVOT) confirms a new extension and is expected to trigger fresh interest and provide a nice pop. A break below the R LEVEL signals a break in the positive market structure and a shift into a more digestive trade state. Expect difficult conditions with false momentum signals.Only below the DP (DOWNSIDE PIVOT) is there the potential for a corrective turn. SIGINATURE STRATEGY -- Technically the MKT is in a BULL TREND but is on the fence to its immediate direction. Opportunity exists on both sides of the MKT with the probability bias to the upside. Expectations are for the MKT to show its hand early in the session and play from that direction for the balance of the day or get set for a difficult choppy trade. Use the BUY R FADE and BUY UP BREAKOUT to get on the positive side of the market anticipating a new advance. Incorporate the SELL UP REVERSAL to protect profits and participate in a pull-back down to the DIR. If the positive momentum is going to continue it will stabilize and base above the DIR. If the current session high point is below the CRX+ then the BUY UP BREAKOUT was not validated and the SELL UP REVERSAL will have the potential to turn the MKT. A failure from the R LEVEL is needed to confirm a break in positive structure of the BULL TREND. Use a SELL R BREAKOUT strategy to participate in a sentiment shift. The current market structure bias with the R LEVEL equal to the DIR identifies a market state with high energy which will add fuel to a negative signal generated from a SELL R BREAKOUT. The tell that the MKT is going to follow through is an initial flush that breaks below the CR- and validates the signal followed by successive lower price structure highs. Incorporate the bulk of size allocation on the initial signal with a minimum 2 APMD trade vision. This strategy has the potential to be the initiator of a sustained correction which should not provide another opportunity to get in within the DIR metrics if it is indeed due to turn sentiment. Note: The balanced structure with the R LEVEL equal to the DIR has the BULL TREND at a decision point.The success or failure today will come in recognizing if the MKT is going to move off the fence away from this area or just seesaw around it. The R LEVEL equal to the DP POSITIVE BIAS POSITIVE STRUCTURE -- The R LEVEL equal to the DP (DOWNSIDE PIVOT) defines the base supporting the positive market structure. If the market is going to continue its higher move high higher move low campaign any weakness will bottom out above here.The market is in buy mode so look for excuses to get in above the R LEVEL. A breach of the UP (UPSIDE PIVOT) should produce a pop on the initial BREAKOUT if the market is going to extend up to the UT2 (UPSIDE TARGET 2). A lackluster UP BREAKOUT signal has the potential to turn the trade digestive with the DIR (DIRECTIONAL) defining the positive structure breaking point. The R LEVEL is a hard base for the BULL TREND and a failure does have the potential to derail positive momentum.Don’t fight negative structure below the R LEVEL as the potential for a sharp corrective sell-off is real. When the R value is BELOW OR EQUAL the DP pivot we are in a BULL trend. BULL STATE -- A BULL TREND signature state is typified by a market that continues to make higher move highs and higher move lows or positive structure. As long as the market continues to hold structure, further gains should be expected. This does not mean there cannot be corrective set-backs but rather any negative price action is expected to exhaust above the lower inflection point that will maintain structure. Any failure or break in the positive structure is more likely to produce a NEUTRAL shift rather than a NEGATIVE TRANSITION.A quiet market is likely to turn positive especially later in the trade period. Typically if the MKT is going to trend higher it will demonstrate that with positive intraday price structure.If not a firm digestive trade is the outlook. BULL STRUCTURE -- A market in a BULL TREND signature state with the R LEVEL equal to the DIR (DIRECTIONAL) defines the turning point for the current positive momentum. The market is in play and the R LEVEL will either confirm or deny the current BULL TREND. If the market is going to continue higher it should remain firm above this inflection point and just go. A BREAKOUT above the UP (UPSIDE PIVOT) confirms a new extension and is expected to trigger fresh interest and provide a nice pop. A break below the R LEVEL signals a break in the positive market structure and a shift into a more digestive trade state. Expect difficult conditions with false momentum signals. Only below the DP (DOWNSIDE PIVOT) is there the potential for a corrective turn. BULL STRATEGY -- The MKT is in a BULL TREND with the R LEVEL equal to the DP. This is the power stance for the positive trend with the R LEVEL defining the structure low point. Expectation is that the positive momentum will continue to build momentum and not look back. Any hesitation in the trend is a sign that the trade may turn digestive whether the MKT is trading above or below the DP R LEVEL. A break in momentum above the R LEVEL will be more BULL TREND DIGESTION and below the R LEVEL BULL TREND CORRECTION. Use the BUY R FADE for the optimal entry to participate in any new BULL TREND. Add to any long position with a BUY DIR BREAKOUT strategy with the trade vision of a new extension higher in the magnitude of at least 2 APMDs. A UP BREAKOUT is needed to confirm a new leg of the BULL TREND. Incorporate the SELL UP REVERSAL to protect profits and participate in a pull-back down to the DIR. If the positive momentum is going to continue, which is what is most likely to occur, it will stabilize and base above the DIR. A failure from the R LEVEL will signal a break in structure and should just go. Typically when sentiment is aligned with the CriticalRange boundary it produces good energy for the Optimal and Hedge strategies. A SELL R BREAKOUT confirms a break in market structure negating the underlying BULL TREND. The best rests of a negative transition start with a good flush which breaks below the CRX- and validates the negative breakout. This trade is corrective so the bulk of size should be allocated on the initial signal with the expectation of a classNameic release with profit targets defined at least 2 APMDs. Note: The R LEVEL at the DP creates a hard make or break level of focus. If the inflection point is the true structure level a sharp reaction will occur after a test or failure. The R LEVEL equal to the DT1 A BEAR TREND signature state is typified by a market that continues to make lower move lows and lower move highs or negative structure. As long as the market continues to hold structure, further losses should be expected. This does not mean there cannot be corrective pull-backs but rather any positive price action is expected to exhaust below the high inflection point that will maintain structure. Any violation of this resistance point or break in the negative structure is more likely to produce a NEUTRAL shift rather than a POSITIVE TRANSITION. If the MKT has been trading on the offer all session but has not been able to follow through on any negative breakout, beware of a corrective squeeze into the close. Typically a strong price move at the end of the session will be followed by weakness in the new trade period. POSITIVE STRUCTURE The R LEVEL equal to the DT1 (DOWNSIDE TARGET 1) creates a support band with the DP (DOWNSIDE PIVOT) and questions the viability of the current BEAR TREND, giving the market more of a digestive expectation. The R LEVEL is the base defining the confirmation breaking point for the next reaction lower. A failure here is negative, however, more of a choppy trend lower is the outlook. Look to FADE a positive price move after an R LEVEL failure rather than selling into new weakness. The DIR (DIRECTIONAL) is the high point for any positive squeeze after an R LEVEL failure if the negative signal is going to play out. A BUY BREAKOUT above the DIR confirms the digestive intentions of this market state with the UP (UPSIDE PIVOT) the expected lid.Only above this resistance is a shift into a NEUTRAL market state more likely. Expect difficult trading conditions. The R LEVEL greater then the DT1 POSITIVE STRUCTURE The R LEVEL below the DT1 (DOWNSIDE TARGET #1) defines a target level for the current negative momentum. Expectation is that the market is going to produce a positive corrective bounce off this support. A break below the DP (DOWNSIDE PIVOT) will set up a play for the R LEVEL support and define the DIR (DIRECTIONAL) as the high point for any positive squeeze if the negative momentum is going to resume course for the R LEVEL support. A break under the R LEVEL is not expected to produce a sharp negative reaction. Avoid selling the market in the hole but rather FADE a positive reaction against the DP or DIR. A BREAKOUT above the DIR is more a signal of digestion than a positive shift with the UP (UPSIDE PIVOT) the expected high point. FADE momentum against this inflection point. Only above the UP resistance is a shift into a NEUTRAL market state the forecast. Expect difficult trading conditions. Market Changed to Neutral- HEAT MAP NEUTRAL STATE -- A market in a NEUTRAL DIGESTION signature state is in a sideways environment with choppy trading conditions. 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 positive shift in the next session’s market state.NEUTRAL DIGESTIVE sessions can be the precursor to a BREAKOUT as the coiling action will build power. Typically a sign that the sentiment is going to change from NEUTRAL DIGESTION to TREND is signaled by an early session trend move with no break in the positive or negative structure. A simple Moving Average is a great tool to use to identify a possible Breakout day with the expectation that if the market is going to scale up or down it will maintain a trade above or below the Moving Average. NEUTRAL STRUCTURE -- SENTIMENT BIAS - POSITIVE BIAS - R=DT1 The R LEVEL equal to the DT1 (DOWNSIDE TARGET #1) creates a support range with the DP (DOWNSIDE PIVOT) that defines the lower extreme of this technical state. The sentiment bias will maintain an underlying positive tone with all trading above the DP-DT1 R LEVEL price band. Expectations are for prices to find support in this zone for a rally targeting the upper resistance band at the UP. A break below the DT1 R LEVEL is a sign of weakness that has the contract vulnerable to a negative transitional shift. NEUTRAL STRATEGY -- Technically the MKT is in a NEUTRAL DIGESTIVE position. Opportunity exists on both sides of the MKT but choppy sideways trading conditions should be expected. The MKT is in neutral and is more likely to go nowhere fast. Exhaustive signals will work best at the CriticalRange extremes especially off the DP – R LEVEL support band. Use a BUY R FADE and SELL UP FADE strategies to capture the digestive action and add leverage to BUY opportunities using the BUY DP REVERSAL strategy. Don't get stubborn however if the MKT starts to get into trend mode, as the contract may just be expanding its digestive parameters by producing a one way trade into the close and new extreme. Use a BUY UP BREAKOUT and SELL R BREAKOUT to capture a breakout of the digestive condition and transition into a new market state. Note: The MKT is in a sideways market state and the wide structure confirms this expectation. Anticipate the range to narrow verses a breakout.” NEUTRAL STATE DIGESTION -- signature state is in a sideways environment with choppy trading conditions. 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 positive shift in the next session’s market state.NEUTRAL DIGESTIVE sessions can be the precursor to a BREAKOUT as the coiling action will build power. Typically a sign that the sentiment is going to change from NEUTRAL DIGESTION to TREND is signaled by an early session trend move with no break in the positive or negative structure. A simple Moving Average is a great tool to use to identify a possible Breakout day with the expectation that if the market is going to scale up or down it will maintain a trade above or below the Moving Average. NEU NEUTRAL STRUCTURE DIGESTION -- SENTIMENT BIAS - NO BIAS - R=DIR The R LEVEL in the middle of the CriticalRange signals a potential turning point in the current market state. This is a dynamic signature state with the potential to spark a low volatility one-way trade for the balance of the session or a sideways rotation around the CriticalRange mid-point. Look for the MKT’s ability to build structure or not as the tell. The important thing to note about this market structure is that a decision is about to be made. Identifying which theme is going to dominate will typically happen early in the session. An optimal tightening of the coil will typically happen within the CR+ and CR-. Held price structure after a breach of either of these parameters is a tell that the Hedge theme is dominating and the MKT may be ready to breakout. NEU NEUTRAL STRATEGY 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, as the likelihood of this MKT trading sideways is high. Use a BUY DP FADE and SELL UP FADE to participate in a narrowing of the digestive range. These strategies will typically work best when the MKT starts the session pressing either extreme verses rotating around the DIR R LEVEL. In a rotational instance around the DIR R LEVEL use a BUY R BREAKOUT and SELL R BREAKOUT strategy to capture the start of a breakout of the digestive state. The CR+ and CR- play an important roll to validate either breakout strategy. Respect these interior CriticalRange levels. If the integrity of the validation levels remain intact it is a tell that the range trade is narrowing and the MKT is in for a NON EVENT session. Anticipate this rotational trade. A breach of either is a confirmation signal in the direction of the violation. If this signal is followed by trending price action it is the tell that a true breakout is engaging with a minimum 2 APMD target. In this scenario where the MKT is breaking out of a rotational trade around the DIR R LEVEL avoid a SELL UP FADE or BUY DP FADE unless there has been a break in price structure or other tactic signal in front of the UP or DP before accepting a FADE entry. Instead consider a BUY UP BREAKOUT or SELL DP BREAKOUT to add to any position from the DIR R LEVEL. Note: NEUTRAL DIGESTIVE sessions can be the precursor to a BREAKOUT as the coiling action will build power. Typically a sign that the sentiment is going to change from neutral digestive to trend is signaled by an early session trend move with no break in the positive or negative structure. A simple Moving Average is a great tool to use to identify a possible Breakout day with the expectation that if the market is going to scale up or down it will maintain a trade above or below the Moving Averages. NEU NEUTRAL OPTIONS DIGESTION ANALYSIS -- In a Neutral Digestive (NEU) market state look to sell options, either early in the trading session on market rallies and breaks at Major PriceMap levels or minor level extremes. Until a breakout is confirmed above the UP (Upside Pivot) or below the DP (Downside Pivot), a trader should resist buying options, as false signals and sideways trading is likely. A trader may be presented with several opportunities during the session to move in and out of option sales profitably. Capitalizing on these trades when able can lead to successful trading periods even when the underlying market has little net movement. Traders entering the session short options may look to hold these positions until a breakout is signaled. Traders with long positions may want to use what movement the market offers to cover positions. DIRECTIONAL PRICE EXPECTATION NEUTRAL DIGESTIVE sessions can be the precursor to a BREAKOUT as the coiling action will build power. Typically, a sign that the sentiment is going to change from NEUTRAL DIGESTION to TREND is signaled by an early session trend move with no break in the positive or negative structure. A simple Moving Average is a great tool to use to identify a possible Breakout day with the expectation that if the market is going to scale up or down it will maintain a trade above or below the Moving Average. - SIDEWAYS PRICE EXPECTATION. - BREAKOUT MORE LIKELY WHEN R = DIR. DNC STATE -- A market in a BEAR TREND CORRECTION signature state has produced a positive signal against a negative trend. The market is vulnerable to the downside, however does have the potential to produce a counter trend corrective rise. The market is searching for resistance and is characterized by a stop and go trade, with sharp positive reactions. Positive corrective action can disappear quickly so avoid leveraging up on any rally as the negative momentum will try to re-establish itself. This is a money state as good trade action is expected. The MKT has played a card and will continue to tighten the collar on weak short positions or revert to negative BEAR TREND structure. Don’t fight negative momentum below the CriticalRange midpoint as the session has the potential to be the start of a new trend move lower. DNC STRUCTURE -- SENTIMENT BIAS - NO BIAS - R=DIR A market in a BEAR TREND CORRECTION signature state with the R LEVEL at the DIR (DIRECTIONAL) is defining the base for any positive corrective shift. If the MKT is going to hold firm, it will maintain a trade above here. A failure from the DIR R LEVEL is a sign of weakness that threatens a return of the BEAR TREND but more likely a soft NEUTRAL trade. If the MKT is going higher, it should build positive structure [higher move highs and high move lows] above the DIR R LEVEL and not look back. If it cannot do this then the potential for a return to a BEAR TREND posture is real. If the MKT starts to build negative structure below the DIR R LEVEL, roll with it and maintain a negative outlook until that structure is broken at which time the outlook will be for a sideways mess. Trading above the DIR R LEVEL can be volatile as buying interest in emotional rallies can quickly disappear. Use the PriceMap framework to make position management adjustments and aggressively protect profits. DNC STRATEGY -- Technically the MKT is in a BEAR TREND CORRECTION but today it is on the fence to its immediate direction, providing opportunity on both sides. A BUY R FADE will work better early in the session targeting the UP. This is the market structure high point for the underlying BEAR TREND which will maintain its integrity if the underlying trend is going to remain intact. A breakout above the UP is a sign of strength that confirms a transitional shift in state. Use the BUY UP BREAKOUT strategy anticipating an emotional advance targeting 2 APMDs. Once validated above the CRX+ the market should not trade back below the UP, if so it is a sign that the trade will turn digestive. Use a SELL UP REVERSAL strategy to capture a failure back into a digestive trade down to the DIR. If the SELL UP REVERSAL strategy is triggered early in the session it does have the potential to be the start of a new BEAR TREND. Work negative structure anticipating the resumption of the BEAR TREND and a 2-3 APMD move. Use a SELL R BREAKOUT strategy to add to any short position or create a new one with the expectation that a new trend move is underway. Work negative structure. Note: The MKT is in a corrective position and with the R LEVEL at the DIR (DIRECTIONAL) puts this market in the spotlight. If the SELLers are ready to return the market will start to build negative structure below the DIR and continue lower. A rally above the DIR R LEVEL is a sign of strength that has the market flirting with a positive turn. Don’t fight strength above the DIR R LEVEL. Although the rally is not expected to follow through it can influence the market for the balance of the session. DNC OPTIONS ANALYSIS -- An appropriate options strategy in a BEAR TREND CORRECTION (DNC) market state is to seek opportunity selling calls on emotional market rallies. A trader may have several opportunities during the session to buy back the previously sold calls on market breaks then reestablish call sales on additional rallies to appropriate levels. This type of trading action can result in very profitable days even though the underlying market itself may end the trading session with little net change. Traders entering the trading session with long or short option positions may want to employ a similar strategy, using rallies or breaks to exit calls and puts. DIRECTIONAL PRICE EXPECTATION This is one of the best tradable market states. Good volatility is expected with opportunity on both sides of the market. In addition, this market state does set up a longer-term trade opportunity to get back into the underlying negative trend after the positive corrective signal has exhausted itself, having the potential to be the start of a new trend move south. |