Trade Strategy 1.2.18

Markets
 
With the first trading session of the year on deck, investors are sketching their market predictions for 2018. Will U.S. stocks keep rising? Which sectors will be hot? Tax bill benefits or debt ceiling worries? U.S. mid-term elections? Will the oil rally continue? Cryptocurrency surprises? Next steps for monetary policy? Dollar downturn? Brexit and NAFTA? Other trade agreements? How will the second year of Trump’s presidency shape the markets? Any other stock-related tea leaves?
 
Crude oil benchmarks, Brent and WTI, have both started the year above $60 per barrel for the first time since January 2014. “Growing unrest in Iran set the table for a bullish start to 2018,” the U.S.-based Schork Report said in a note to clients. Iran is the third-largest producer in OPEC, which agreed last year to extend its oil output cuts through Dec. 31, 2018.
 
In Asia, Japan -0.1%. Hong Kong +2%. China +1.2%. India flat. 
In Europe, at midday, London -0.4%. Paris -0.9%. Frankfurt -0.7%
Futures at 6:20, Dow +0.1%. S&P +0.2%. Nasdaq +0.1%. Crude +0.4% to $60.63. Gold +0.3% to $1313.10. Bitcoin +1% to $13546. 
Ten-year Treasury Yield +2 bps to 2.43%
  
(Source: Seeking Alpha)

Economic Calendar

9:45 PMI Manufacturing Index

S&P 500 (ES)

Today is Cycle Day 3 (CD3)…Year end selling drove indexes lower into final minutes of trading. Overall previous holiday week was a non-event as most traders took a trading holiday as well.

As new year trade begins, we’ll be patient for Mr. Market to guide us to what his intentions are for direction.  Expectation is for early push higher to recover Cycle Day 1 Low (2683.00.

Nasdaq 100 (NQ)

FAANG Stocks have been the weakest into final week of trading as cumulative delta readings were extremely negative. Expectation is for an early bounce recovery to push price back above Cycle Day 1 Low (6442.25).

Range Projections and Key Levels (ES)

HOD  ATR Range Projection: 2687.12; LOD ATR Range Projection: 2670.13; Cycle Day 1 Low: 2683.00 3 Day Central Pivot: 2683.25; 3 Day Cycle Target: 2708.50; 10 Day Average True Range: 12.62; VIX: 10.88

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

Click Here

Today’s Hypotheses: March 2018 (ESH) 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: IF price penetrates and converts 2687, THEN upside targets 2695.

Scenario 2: IF price violates and converts 2675, THEN downside targets 2669 – 67 zone.

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

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 –HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN