Another big day for oil prices! West Texas Intermediate on Tuesday settled at a premium to its global counterpart Brent crude for the first time in more than five years, and the spread between the two benchmarks is now nonexistent. While the lifting of the U.S. oil export ban and a surprise dip in inventories could be triggering the move, analysts focused on investor sentiment ahead of the holidays, with traders covering shorts and squaring away their positions. At the time of writing: Brent +1% to $36.48; WTI +0.9% to $36.48. (Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:30 Durable Goods
10:00 New Home Sales
10:00 Reuters/UofM Consumer Sentiment
10:30 EIA Petroleum Inventories
11:30 Results of $13B, 2-Year FRN Auction
S&P e-mini (ES) is extending Cycle gains in overnight trade targeting 2047.25 CD1 Penetration Level. With holiday trade upon us, there is very little resistance to price movement with lowering volume participation.
Today is Cycle Day 1 (CD1)…NORMAL SPILL DOWN…Residual upside momentum may continue before the next decline begins. First sign of weakness would be violation of overnight low (2030.75). Average Cycle Range Decline Target is 2013.25.
Odds if Decline > 10 = 72%; Odds of Decline > 20 = 42%; Average Range = 18.75; Max Average Range = 22.50; Average Decline = 23.25; Possible HOD = 2044.75; Possible LOD = 2013.25.
**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 (2036.50), THEN initial upside objective measures 2040.50 – 2043.75 STATX Zone. Above this zone extends to 2044.75 – 2047.25 Average Penetration Level.
Scenario 2: Violation of ONL (2030.75) would be sign of weakness initially targeting 2025.75 – 2022.00 Central Pivot Zone. Below this zone extends downside to 2013.25 Cycle Range Decline Target.
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