It didn’t take long after China’s Lunar New Year holiday for the Shanghai Composite to return to its old ways. The index today dropped 6.4%, extending its fall this year to 22%, as surging money-market rates signaled tighter liquidity and the offshore yuan weakened for a fifth day, while the country’s vice finance minister warned of pressure on exports. The plunge comes as world leaders gather for a G20 meeting in Shanghai, where current market turmoil and a global economic slowdown are expected to be key topics of discussion.
In Asia, Japan +1.4% to 16140. Hong Kong -1.6% to 18889. China -6.4% to 2741. India -0.5% to 22976.
In Europe, at midday, London +2.2%. Paris +2%. Frankfurt +1.1%.
Futures at 6:20, Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude -0.5% to $31.99. Gold -0.3% to $1235.40.
Ten-year Treasury Yield -2 bps to 1.72%
(Source: Seeking Alpha)
8:30 Durable Goods
8:30 Initial Jobless Claims
9:00 FHFA House Price Index
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
1:00 PM Results of $28B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
Early selling gave way to a key V-Reversal from 1892 – 1891 “confluence zone” outlined in prior DTS Report 2.24.16. Powerful rally also achieved and exceeded 1924.48 which was projected HOD target. In overnight trade price is relatively quiet holding above 1922.75 key 3 Day Central Pivot.
Range Projections and Key Levels:
HOD Range Projection = 1949.73; LOD Range Projection = 1909.02; CD3 Maximum Penetration Level = 1946.11; CD3 Maximum Violation Level = 1872.78; Cycle Day 1 Low = 1915.25; 3 Day Central Pivot = 1922.75; 3 Day Cycle Target = 1953.04; 10 Day Average True Range = 29.48.
**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 1920.75 – 1924.75 3D CPZ, THEN initial objective is retest of PH (1931.25). Conversion of this level targets 1943 SPOT. Further strength above this level expands range targeting 1946 – 1953 confluence zone.
Scenario 2: Failure to convert PH (1931.25) and subsequent violation of 1920.75 opens door to retest CD1 Low (1915.25) and potentially LOD target (1909.02).
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