World shares are heading into the green (Asia closed lower overnight) despite shaky commodity markets, a junk-bond selloff and a likely Fed rate hike tomorrow. Gold hit six-year lows yesterday and oil fell below $35/bbl, but both are now bouncing higher. The high-yield bond market also plunged drastically due to its ties to crude prices. A Fed rate hike on Wednesday would be the first increase in nearly a decade, and is viewed as a first step toward normalizing monetary policy and a broader U.S. economic recovery. (Source: Seeking Alpha)
FOMC meeting begins
8:30 Consumer Price Index
8:30 Empire State Mfg Survey
8:55 Redbook Chain Store Sales
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital
Morning price weakness lead to afternoon strength as Buyers absorbed selling in oversold extreme conditions to shift dynamics back to bullish camp. Price is currently higher in overnight trade, so Bulls will need to keep a strong bid on any weakness. Goal remains to get back to prior CD1 Low at 2035.75 which would negate the prior Cycle failure.
Today begins new Cycle Day 1 (CD1)…NORMAL SPILL DOWN…Odds favor the secure cycle low was put in prior session…Odds of Decline > 10 = 72%; Odds of Decline > 20 = 42%; Average Range = 18.75; Max Average Range = 22.50; Average Decline = 23.00; Possible HOD = 2035.75; Possible LOD = 1997.00.
***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: IF price clears and converts PH (2019.00), THEN odds favor reaching 2026.10 Weekly Pivot, followed by 2029.25 CD1 Maximum Penetration Level. Above this level targets prior cycle low at 2035.75.
Scenario 2: Failure to convert PH (2019.00) suggest a pullback to consolidate prior rise in price. Levels to be mindful of for renewed buy response are 2012.00, 2008.00, 2004.75 – 2001.50 Central Pivot 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