Stocks in Europe are battling to shake off another sharp turn lower in China. Steady gains of under 1% were being put in by major indexes in the U.K., Germany, and France before they slipped back into negative territory. Volatility-measuring VSTOXX Index is showing little reaction to the earlier tumble in Asian stocks. U.S. stock futures are pointing higher in early action.
Oil prices are sharply lower to start off the week as concerns over demand from China impact trading again, along with some fresh worries. Morgan Stanley is the latest major investment firm to forecast oil prices could fall into the $20s with the U.S. dollar continuing to strengthen against major currencies. There is also news that Saudi Arabia is considering an IPO for its state oil company, a development that adds a new layer of anxiety with traders. Brent crude is down 1.42% to $32.69, while WTI crude futures are 1.6% lower at $32.62.
In Asia, Japan -0.4% to 17,698 . Hong Kong -2.8% to 19,889. China -5% to 3192. India -0.4% to 24825.
In Europe, at midday, London -0.2%. Paris -0.1%. Frankfurt -0.1%.
Futures at 6:20, Dow +0.2%. S&P +0.3%. Nasdaq +0.2%. Crude -1.6% to $32.62. Gold +0.5% to $1103.80.
Ten-year Treasury Yield Flat at 2.14%.
(Source: Seeking Alpha)
10:00 Labor market condition index
(Source: Seeking Alpha)
Traders will look shake off some of last weeks losses and recover price back above Key Cycle Low (1928.25) to salvage a positive 3 Day Cycle. Current downtrend line crosses at today’s HOD Project at 1938.50. Should price be able to clear and convert this key level, then there is further upside potential targeting 1958.75 3 Day Cycle Rally Target.
Today is Cycle Day 3 (CD3)…SPILL UP…Odds favor a rally attempt following deep extreme low (1895.00)…Initial upside objective is to recapture CD1 Low (1928.25)…Bulls will need to convert for higher…Bears need a rejection. Average True Range (3) is 45.00 with HOD Range Projection 1938.50. LOD Range Projection is 1883.50.
**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 is currently off deep extreme lows of 1895 and holding above 1912 SPOT. Price will need to hold this level and push higher to recapture 1928.50 to get further upside rally going. IF this occurs, THEN 1938.50 followed by 1951.00 are the higher objectives.
Scenario 2: Failure to convert 1928.50 and subsequent violation and conversion of 1912.00 SPOT keeps the current downtrend valid and bears in control. Possible retest of ONL 1895 SPOT may be needed to test resolve of bulls. Extreme Low is 1883.50.
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