Trade Strategy 09.10.15

Markets

European and Asian shares have tracked yesterday’s U.S. stock performances and have pulled back after enjoying strong gains earlier this week, although U.S. futures were back in the green at the time of writing. For those looking for reasons for any of the negativity, take your pick from the following: worries about China as producer prices remain firmly in deflation; will the Fed raise rates next week or hold off?; concerns about Japanese capital spending; Brazil being sent into junk territory; and the lack of pizzazz in Apple’s (NASDAQ:AAPL) product launches yesterday.

Today’s Economic Calendar

8:30 Initial Jobless Claims
8:30 Import/Export Prices
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Petroleum Inventories
11:00 EIA Natural Gas Inventory
1:00 PM Results of $13B, 30-Year Note Auction
4:30 Money Supply
4:30 Fed Balance Sheet

PTG Trading

Preparing for yesterday’s Session we knew it was Cycle Day 1 (CD1) and expectation was for NORMAL SPILL DOWN…So the decline should not have been surprising to readers of the PTG Daily Trade Strategy. What was “amazing” was the magnitude of the decline, as our most bearish lower price projections were not only violated, but violated in a BIG way.

Volatility (VIX) has elevated to 26 handle…Which simply means intra-day price ranges are again expanding, so adjust your Position Size and Stops accordingly.

Today is Cycle Day 2 (CD2)…NORMAL NEUTRAL/SPILL UP…Odds of Rally > 10 = 83%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD = 1964.75 (based on Average Rally); Possible LOD = 1917.50 (based on CD2 Violation Level)

***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

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Today’s Hypotheses: September (U) 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 found strong buy response at 1935.50, which is 3D CPZ and has since rallied in overnight trade to reach 1964.75 Average Cycle Rally Target. Any test of 1935 handle will be critical for Bulls to respond strongly to secure this as current cycle low.

Scenario 2: Continued selling during cash session which violates and converts 1935 handle will potentially force long liquidation (margin calls) throughout the market. Should this unfold and buyers fail to respond, lower projections measure 1931 SPOT, followed by 1917.25 CD2 Violation Level.

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!

Good Trading…David

“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


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