Trade Strategy 10.11.18

Markets
 
A mix of higher bond yields and growth worries are continuing to take their toll on the markets, with equities across Asia and Europe getting slammed overnight after a bloodbath in the U.S. Led by tech carnage, the S&P 500 and the Dow posted their biggest daily declines since Feb. 8, while the Cboe Volatility index (VIX) surged 43.9% to 22.96. Adding to the worries were several statements from President Trump that referenced a long-awaited “correction” and said that the “Fed is going loco” by raising rates.
 
In Asia, Japan -4%. Hong Kong -3.5%. China -5.2%. India -2.2%
In Europe, at midday, London -1.7%. Paris -1.7%. Frankfurt -1.3%
Futures at 6:20, Dow -1%. S&P -0.9%. Nasdaq -0.9%. Crude -1.9% to $71.76. Gold +1.2% to $1207.90. Bitcoin -4.8% to $6235. 
Ten-year Treasury Yield -5 bps to 3.17%
 
(Source: Seeking Alpha)
 
Economic Calendar

http://mam.econoday.com/

8:30 Initial Jobless Claims
8:30 Consumer Price Index
10:30 EIA Natural Gas Inventory
11:00 EIA Petroleum Inventories
1:00 PM Results of $15B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet

S&P 500

Today is Cycle Day 3 (CD3)…Following hard sell-off in prior RTH Session, price in Globex has been relatively volatile as bulls & bears attempt to find price agreement and balance. With the Volatility Index now @ 24, expect wider price swings and as such, risk parameters need to be adjusted accordingly. This would be a good time to review your personal VaR (Value at Risk) parameters.

CD3 Range High = 2770.00          CD3 Range Low = 2763.00          CD3 Range Avg = 22.50 

Scenario 1: IF price holds bid above 2760, THEN upside targets 2775 – 2780 zone.

Scenario 2: IF price holds offer below 2760, THEN downside targets 2748 – 2742 zone.

Range Projections and Key Levels (ES) December (Z) Contract

HOD  ATR Range Projection: 2785.50; LOD ATR Range Projection: 2747.25; Cycle Day 1 Low: 2784.50; 3 Day Central Pivot: 2861.50; 3 Day Cycle Target: 2902.00; 10 Day Average True Range 38.25; VIX: 24.00

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Nasdaq 100 (NQ)

Today is Cycle Day 3 ……Following hard sell-off in prior RTH Session, price in Globex has been relatively volatile as bulls & bears attempt to find price agreement and balance. With the Volatility Index now @ 24, expect wider price swings and as such, risk parameters need to be adjusted accordingly. This would be a good time to review your personal VaR (Value at Risk) parameters.

CD3 Range High = 7414.00         CD3 Range Low = 6956.00          CD3 Range Avg = 52.50

Scenario 1: IF price holds bid above 6985, THEN upside targets 7020 – 7030 zone.

Scenario 2: IF price holds offer below 6985, THEN downside targets 6930 – 6900 zone.

Range Projections and Key Levels (NQ) December (Z) Contract

HOD  ATR Range Projection: 7081.00; LOD ATR Range Projection: 6889.00; Cycle Day 1 Low: 7337.00; 3 Day Central Pivot: 7303.25; 3 Day Cycle Target: 7400.00; 10 Day Average True Range: 156.00; VIX: 24.00

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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