Global stocks remained cautious on Thursday as traders awaited clues on the timing of the first U.S. rate hike in nearly a decade. Investors will hear speeches from Janet Yellen and four regional Fed presidents this morning, as well as Vice Chairman Stanley Fischer this afternoon. Meanwhile, ECB President Draghi said in Brussels today that downside economic risks are “clearly visible,” which may translate into an expansion of QE in December. “Markets will drift until plans from the two central banks become clear,” said Daniel Murray, chief economist at EFG Asset Management. (Source: Seeking Alpha)
8:30 Initial Jobless Claims
9:05 Fed’s Bullard: “Rethinking Monetary Policy”
9:30 Janet Yellen speech
9:45 Fed’s Lacker: “Rethinking Monetary Policy”
9:45 Bloomberg Consumer Comfort Index
10:00 Job Openings and Labor Turnover Survey
11:00 EIA Petroleum Inventories
1:00 PM Results of $16B, 30-Year Note Auction
2:00 PM Treasury Budget
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
6:00 PM Stanley Fischer
S&P e-mini (ES) came within a whisker (1 tic) of our upside target of 2087.50 outlined in Scenario 1 of Daily Trade Strategy 11.11.15. Yesterday was Cycle Day 1 (CD1) and the normal spill was down with an average range of 18.75 handles. The actual session’s range was 19.25, so all-in-all a “textbook” Cycle Day 1 (CD1).
Today is Cycle Day 2 (CD2)…NEUTRAL SPILL…Residual price weakness may continue to push price a bit lower to find a renewed buy response from bulls…Expectation is for more “back n fill” trade in search of firmer footing with price action more is “drift-mode”. Price action is getting increasingly heavy as there is a Bearish Shift in the 3 Day Central Pivot Zone Structure. BULLS MUST PERFORM!
Odds of Rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD= 2095.50 (CD2 Penetration); Possible LOD = 2056.75 (Avg Cycle Decline)
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: December (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 2: Violation and conversion of PL (2068.00) opens door for additional selling to probe for secure cycle low…Levels to be mindful of for potential buy response are: 2065.75, 2063.50, 2062.75.
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