The deepened resolve of OPEC to hold oil output at high levels will help keep the global oil glut in play until late into 2016, according to the International Energy Agency. Though Saudi Arabia and Iraq are already pumping oil at a near record pace, low-cost output from the region could increase even more after sanctions against Iran are lifted. Brent crude futures are down 1.59% to $39.10 in early trading, while WTI crude is 1.36% lower at $36.26. The energy sector will remain in focus all day with the IEA scheduled to release a key report on oil later today. (Source: Seeking Alpha)
8:30 Producer Price Index
8:30 Retail Sales
10:00 Business Inventories
10:00 Reuters/UofM Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
Price rallied to reach Average Cycle Range (23 handles) and Three Day Central Pivot at 2058.00 SPOT before getting rejected, tumbling back down 17 handles to settle at 2040.50.
This is decidedly bearish price action as each attempted rally fizzles…Market On Close Sell Imbalances has also dominated as “risk-off” is the current investing/trading theme.
Today is Cycle Day 2 (CD2)…NEUTRAL SPILL…Odds of Rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.75; Possible HOD = 2049.00; Possible LOD = 2018.00
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: March 2016 (H) 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: Price is currently below CD1 Low (2035.75)…Price will need to find support and clear and convert this level for any rally attempt for this Cycle. Should this occur first objective is 2044.25 – 2046.00, followed by 2049.00 – 2051.50 3D CPZ.
Scenario 2: IF price violates and converts CD1 Low (2035.75), THEN odds favor a push lower to 2024.00 CD2 Violation Level…Below this level targets 2018.00 Average Cycle Range Decline. Deep extremes are between 2016.50 – 2008.50 STATX Zone.
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