What’s in store for the markets today? Asian shares fell heavily into negative territory, while European equities rose, following another selloff on Wall Street due to world growth concerns, uncertainty in China and lower oil prices. “The ground right now is so unstable, and there’s so much anxiety,” said Ayako Sera, a market strategist at Sumitomo Mitsui Trust Bank. Yesterday, U.K., French and Japanese stocks fell into a bear market (more than 20% below their 2015 highs), while U.S. indices dropped 10% under their prior peaks, entering a correction.
In Asia, Japan -2.4% to 16017. Hong Kong -1.8% to 18543. China -3.2% to 2880. India -0.4% to 23962.
In Europe, at midday, London +0.4%. Paris +0.5%. Frankfurt +0.6%.
Futures at 6:20, Dow -0.6%. S&P -0.6%. Nasdaq -0.6%. Crude -1.2% to $28.00. Gold -0.6% to $1100.10.
Ten-year Treasury Yield flat at 1.97%
(Source: Seeking Alpha)
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
4:30 Money Supply
4:30 Fed Balance Sheet
Morning margin selling drove price lower to deep extreme low of 1808.00 SPOT outlined in prior DTS Report 1.20.16. Here is excerpt…“Scenario 2: Violation and conversion of ONL (1829.25) forces continued margin selling targeting 1818.50, then 1808.00 SPOT” Actual LOD marked 1804.25. Once the last seller was out, Algos proceeded to rip price higher by 50 handles, recovering about 50% of sessions early losses.
Algorithmic Creed: “Shake’em…Bake’em…Strip’em and Rip’em”…This is simply the new trading world order we live in folks…So get used to it…Gotta “Think Like an Algo”.
Today is Cycle Day 2 (CD2)…NORMAL NEUTRAL SPILL…Expectation for today is for some consolidation trade to balance out recent wide volatility swings. Current ATR (10) stands at 46.75…Initial Resistance is marked at 1875 – 1880 zone…Initial Support marked between 1840.00 – 1850 Zone. LOD Range Projection = 1829.25…HOD Range Projection = 1912.00.
Markets are continuing to take their directional clues from Crude Oil, so if CL can find some type of price stabilization without further deterioration, then odds increasingly favor a relief rally in the major indexes.
Major Winter Blizzard is expected for the Mid-Atlantic and NYC this weekend!
**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: IF price can hold above 1840 SPOT, THEN initial upside targets 1850, followed by 1866 3 Day Central Pivot. Above this level rally can accelerate to 1891.00.
Scenario 2: Violation and conversion of 1840 SPOT opens door to continued selling targeting 1829.25, then 1823.00.
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