Oil prices are recovering slightly, although WTI crude is still below $40 for a fourth consecutive day. “We are in a situation where the market’s had a big fall and speculators have taken a bit off the table,” said Chris Weston, chief market strategist at IG Ltd. “Perhaps this move has gone a little bit too far.” The rally comes despite Tuesday’s API figures which showed crude stocks declining 1.9M barrels last week. The EIA’s inventory data will be released today at 10:30 a.m. ET. Crude futures +1.5% to $38.08/bbl. (Source: Seeking Alpha)
7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
1:00 PM Results of $21B, 10-Year Note Auction
Sellers continued exert dominance in prior Session as Bulls failed to sustain any rally attempt. Price found responsive buyers at 2053 handle, which is Key Violation Level. We will mark this level as “key support”. Bulls will need to get price back above CD1 Low (2064.50) for Positive 3 Day Cycle.
Today is Cycle Day 3 (CD3)…NORMAL SPILL UP…Odds of 3D rally > 10 = 83%; Odds of 3D Rally > 20 = 54%; Average Range = 17.75; Max Average Range = 22.00; Possible HOD = 2073.50 (based upon max average range); Possible LOD = 2040.50 (based upon average violation of CD2 low).
***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 above 2053.50 SPOT, THEN initial upside objective is to clear and convert 2064.50 (CD1 Low). Should this occur, then additional upside targets 2073.50 3 Day Central Pivot.
Scenario 2: Failure to clear and convert 2064.50 (CD1 Low) and subsequent violation of 2053.50 SPOT opens door for more long liquidation targeting 2048.50 – 2044.75 STATX Zone…Below this zone measures 2040.50 CD3 Average Violation Level.
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