Oil rose around 6% yesterday, its best one day performance since April, on renewed hopes of an OPEC deal to cut production. But prices are now dipping lower after the IEA left its supply and demand forecasts unchanged despite the 2015 Paris Climate Change Agreement entering into force. “The difficulty of finding alternatives to oil in road freight, aviation and petrochemicals means that, up to 2040, the growth in these three sectors alone is greater than the growth in global oil demand,” the IEA said in its annual World Energy Outlook.
In Asia, Japan +1.1% to 17862. Hong Kong -0.2% to 22280. China -0.1% to 3205. India flat at 26298.
In Europe, at midday, London -0.5%. Paris -0.5%. Frankfurt -0.4%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -1.3% to $45.21. Gold -0.1% to $1223.80.
Ten-year Treasury Yield +4 bps to 2.28%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
7:30 Fed’s Kashkari speech
8:30 Producer Price Index
9:15 Industrial Production
10:00 NAHB Housing Market Index
10:00 Atlanta Fed’s Business Inflation Expectations
10:30 EIA Petroleum Inventories
4:00 PM Treasury International Capital
Shallow decline on CD1 and a strong hold of key 2162 handle which we outlined in prior DTS Briefing 11.15.16 lead to late day rally which hit upside target of 2184 handle.
Price will need to convert this zone for continued expansion, targeting 2188 – 2194 extreme zone. Expectation for today will be for some “back n fill” back into prior day’s range with 2162 handle marked as KEY SUPPORT. The breakpoint zone of 2168 – 70 will be first test of bulls sustainability.
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: 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 1: IF price holds 2168 – 70 breakpoint zone on pullback, THEN bulls remain dominant, with potential of pushing back higher to 2183 – 84 zone. Above this zone and continued expansion can unfold targeting 2186 – 2188 zone.
Scenario 2: Failure to hold at or above 2168 – 70 zone will be first kink in bulls armour…This would suggest possible deeper pullback testing 2162 key support. Below this level opens door for accelerated selling targeting 2155 handle.
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
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