World shares are dipping into the red again, as investors continue to use oil prices as a health gauge of the global economy. At an event in Houston on Tuesday, Saudi oil minister Ali al-Naimi ruled out production cuts anytime soon, sending crude sharply lower despite talk of a mid-March oil producer meeting. “His comments are hardly a surprise. Yet, the latest development seems to suggest that for oil producers to get more united they will have to feel more pain,” said Ayako Sera, senior market economist at Sumitomo Mitsui. New API figures showing a further build in U.S. stockpiles are also weighing on the commodity. Crude futures -3% to $30.91/bbl.
In Asia, Japan -0.9% to 15916. Hong Kong -1.2% to 19192. China +0.9% to 2929. India -1.4% to 23089.
In Europe, at midday, London -1.4%. Paris -2.2%. Frankfurt -2.4%.
Futures at 6:20, Dow -0.8%. S&P -0.7%. Nasdaq -0.9%. Crude -3% to $30.91. Gold +1.1% to $1236.40.
Ten-year Treasury Yield -5 bps to 1.69%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:00 Fed’s Lacker: Monetary Policy
9:45 PMI Services Index Flash
10:00 New Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $13B, 2-Year FRN Auction
1:00 PM Results of $34B, 5-Year Note Auction
1:15 PM Fed’s Kaplan: Monetary Policy
6:30 PM Fed’s Bullard speech
Overnight trade continues the decline pushing below PL (1915.25) and extending down closing in on 1892.60 Max Violation Level and today’s projected range low of 1891.77.
Today is Cycle Day 2 (CD2)…NORMAL NEUTRAL…ABERRANT SPILL DOWN Price has broken below 3 Day Central Pivot which has shifted bias to downside. Bulls will need to recover this level squarely in short order otherwise it’s going to be a tough sled. 1900.00 – 1898.00 is a critical hold for support.
Range Projections and Key Levels:
HOD Range Projection = 1924.48; LOD Range Projection = 1871.77; CD2 Maximum Penetration Level = 1947.96; CD2 Maximum Violation Level = 1892.60; Cycle Day 1 Low = 1915.25; 3 Day Central Pivot = 1920.75; 3 Day Cycle Target = 1946.88; 10 Day Average True Range = 28.48.
**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 can hold at or above 1898.00 – 1900 zone, THEN odds favor potential rally back to 1916.00 break point. Multiple layers of resistance now exist between 1916.00 – 1926.00.
Scenario 2: Price has broken down through PL (1915.25) and has extend down to 1900.00 – 1898.00 critical support zone. IF price cannot rally during cash session further downside targets 1892 – 1891 confluence zone. Statistical Extreme (STATX) measures 1882.75.
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