How’s oil beginning another holiday-shortened week? Brent and U.S. crude switched between premium and discount to each other several times in post-Christmas trading – in a market heavily plagued by oversupply. However, traders aren’t interpreting the movements too much, as low liquidity means that prices could move abruptly without changes in price fundamentals. It’s also likely to be a quiet next few days for the energy sector, except for the U.S. inventory reports which will be published on Wednesday and Thursday. Brent -1.9% to $37.19; WTI -2.4% to $37.17. (Source: Seeking Alpha)
10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $26B, 2-Year Note Auction
S&P e-mini (ES) failed to sustain higher bid in shortened holiday trade, resulting in selling into closing bell last week. Price weakness continues throughout overnight and into pre-cash open trade, with last sale marked at 2041.00.
Today is Cycle Day 3 (CD3)…Having reached the 3 Day Cycle Target (2056.75) and failed to auction higher, the decline has now begun in search for a new secure cycle low. Average Range Target today is marked at 2037.75.
Odds of 3D Rally > 10 = 83%; Odds of 3D Rally > 20 = 54 % (both achieved); Average Range = 17.75; Max Average Range = 22.00; Possible HOD = 2056.75; Possible LOD = 2037.75.
**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 lower in overnight trade…Key marker for bulls to convert for higher is 2043.75. IF this can occur, THEN upside objective is to recapture PL (2049.00). Above this level targets 2053.25.
Scenario 2: Price has violated PL (2049.00) in overnight trade…Price is currently trading within 3 Day Central Pivot Zone (2043.75 – 2040.25)…Range target measures 2037.75. Violation and conversion below this level opens door to retest 2030.80 prior cycle low.
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