What goes up must come down? Global markets are in full retreat as a relentless slide in oil prices and a weaker world growth outlook from the IMF dealt another blow to investor appetite. Hong Kong shares tumbled to their lowest levels since the depths of the global financial crisis, Japan’s Nikkei entered a bear market and equities everywhere else are deep in the red. With risk out of favor, sovereign bonds and gold are in demand. Yields on U.S. 10-year Treasuries fell below 2.00% – down a massive 29 basis points since the new year began – while the yellow metal advanced 0.5% to $1,094 an ounce.
Crude futures are getting slammed again, with U.S. oil falling to its lowest since September 2003 on worries about a global glut. The drop comes after the International Energy Agency, which advises industrialized countries on energy policy, warned on Tuesday that oil markets could “drown in oversupply”.
In Asia, Japan -3.7% to 16417. Hong Kong -3.8% to 18886. China -1% to 2977. India -1.7% to 24062.
In Europe, at midday, London -3%. Paris -3.3%. Frankfurt -2.9%.
Futures at 6:20, Dow -1.8%. S&P -1.8%. Nasdaq -1.9%. Crude -2.3% to $27.80. Gold +0.5% to $1094.50.
Ten-year Treasury Yield -5 bps to 1.98%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Housing Starts
8:55 Redbook Chain Store Sales
(Source: Seeking Alpha)
There is simply “no hiding” for traders/investors, as every dash of hope of a price recovery is swept away, as sentiment continues to deteriorate. Overnight trade has price pushing down to range extremes near 1834 .50 SPOT.
Today is Cycle Day 1 (CD1)…NORMAL SPILL DOWN…As stated, price has already declined to range extremes (1834.50) and CD1 Maximum Range Violation Level. Average True Range (10) stands at 43.70 handles…This value normalizes the range for the first two-weeks of the new year. Volatility remains elevated and is expected to stay at high levels for the foreseeable future.
HOD Range Projection = 1878.50; LOD Range Projection = 1834.75; CD1 Maximum Range Violation Level = 1834.25; Three Day Central Pivot = 1878.25; Upper STATX Zone = 1904.25 -1910.25; CD1 Maximum Range Penetration Level = 1918.00.
**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 trading at extreme range low near 1834.50 SPOT…Price will need to hold at or above this level for any rally attempt. Clear and convert 1846.50 offers opportunity to rally, initially targeting 1858.50 then 1868.50, with 1878.50 3 Day Central Pivot and HOD Range projection.
Scenario 2: Violation and conversion of ONL (1829.25) forces continued margin selling targeting 1818.50, then 1808.00 SPOT followed by Extreme STATX Zone (1813.25 – 1795.50)
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