Apple’s soggy post-earnings performance, a flood of other earnings news and weaker oil prices are weighing on equities, with U.S. stock index futures swimming in the red. Of the 150 S&P companies that have reported so far, 75.3% have beaten analyst expectations, but poor corporate forecasts appear to be the negative catalyst behind the share pullback and others feel the results haven’t been good enough.
Apple -3.4% premarket after the tech giant reported its first decline in annual revenues in over a decade, but forecast a return to growth next quarter. Meanwhile, iPhone sales continued their decline, falling 5% from the previous year, although that’s an improvement from the 15% drop seen in fiscal Q3. Apple’s (NASDAQ:AAPL) cash pile also continued to swell to a record of over $237B – if that was its own public company it would be the world’s fourteenth largest.
In Asia, Japan +0.2% to 17391. Hong Kong -1% to 23325. China -0.5% to 3116. India -0.9% to 27836.
In Europe, at midday, London -0.9%. Paris -0.8%. Frankfurt -1.1%.
Futures at 6:20, Dow -0.5%. S&P -0.4%. Nasdaq -0.6%. Crude -1.5% to $49.22. Gold -0.1% to $1271.90.
Ten-year Treasury Yield +2 bps to 1.77%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:30 International trade in goods
9:45 PMI Services Index Flash
10:00 New Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $15B, 2-Year FRN Auction
1:00 PM Results of $34B, 5-Year Note Auction
Prior Session was textbook Cycle Day 1 as decline unfolded pushing price down to 2128.75, which is the expected Average Decline Level on CD1. In overnight trade price is hovering around this level attempting to find a secure low.
Today is Cycle Day 2 (CD2)…Current momentum favors bears early as price is below CD1 Low (2135.25) trading near average cycle decline level (2128.75). Price will need to stabilize above 2123 – 25 zone to secure a low. Violation and conversion of this zone projects a push down to 2122 – 2118 STATX Zone.
Range Projections and Key Levels
**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: September (Z) 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 stabilize above 2128 handle, THEN initial upside objective is to recapture 2135.25 (CD1 Low) and convert to support. Should this occur further upside measures 2138 – 2141 zone.
Scenario 2: Violation and conversion of 2128 handle to lower resistance opens door for additional selling targeting 2125 – 2123 zone, followed by 2120.50 LOD ATR Range Projection.
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.”
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