World stocks are deep in the red once again as China fueled fears about its economy by permitting the yuan to weaken further and a nuclear test by North Korea added to geopolitical worries. With ever-increasing concerns, investors are continuing to replace risky assets with safe havens such as Japanese yen, U.S. Treasuries, German Bunds and gold. Is more doom and gloom in store for 2016? (Source: Seeking Alpha)
In Asia, Japan -1% to 18191. Hong Kong -1% to 20981. China +2.3% to 3362. India -0.7% to 25406.
In Europe, at midday, London -1.6%. Paris -1.7%. Frankfurt -1.7%.
Futures at 6:20, Dow -1.5%. S&P -1.6%. Nasdaq -1.7%. Crude -2.7% to $34.99. Gold +0.7% to $1085.40.
Ten-year Treasury Yield -7 bps to 2.18%
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
8:30 Gallup U.S. Job Creation Index
8:30 International Trade
9:45 PMI Services Index
10:00 Factory Orders
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC minutes
Yesterday’s sideways consolidation was expected as outlined in prior DTS Report 1.5.16. Failure on the Bulls to convert 2012 – 2017 zone has setup a continuation move lower as news flow from overseas continues to weigh heavily on investor/trader sentiment.
Today is Cycle Day 3 (CD3)…Cycle targets have already been achieved (2011.50), so as such, the next cycle decline has already begun. In overnight trade price have violated CD1 Low (1980.25) which initially targets 1980.00 – 1975.00 3 Day ATR Target. Further price weakness below this zone measures 1969.00 – 1966.50 CD3 Average Violation Level. Max Violation Extreme is 1963.25.
**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: March 2016 (H) Contract
*****The levels outlined below are more general framework within a larger range…They are to be used are reference prices from which to consider trade opportunities, not hard trade levels.
Scenario 1: Price will need to recapture CD1 Low (1980.25) at minimum to reverse the current down swing. IF this occurs, THEN initial objective is 1991.00 SPOT, followed by 1995.00.
Scenario 2: Violation of CD1 Low which has already occurred in overnight trade targets a wide STATX Zone between 1975.00 – 1966.50.
Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.
Stay Focused…Non-Biased…Disciplined ALWAYS USE STOPS!
“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee
*****This trade strategy report is disseminated for “education only” and should not be viewed in any way as a recommendation to buy or sell futures products.”
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS