Finance ministers and central bank governors from the world’s leading economies have gathered in Shanghai to discuss a response to the darkening global economic landscape. Among the many issues facing them is the plunge in commodity prices, market volatility, exchange rates and the slowdown of China’s economy. G20 participants will try to agree on a communique by Saturday, setting out their policy responses before they depart home. Are the stimulus bells ringing?
In Asia, Japan +0.3% to 16188. Hong Kong +2.5%% to 19364. China +1% to 2767. India +0.8% to 23154.
In Europe, at midday, London +1.2%. Paris +1.8%. Frankfurt +2%.
Futures at 6:20, Dow +0.7%. S&P +0.7%. Nasdaq +0.9%. Crude +2.1% to $33.76. Gold -0.4% to $1234.50.
Ten-year Treasury Yield +3 bps to 1.73%
(Source: Seeking Alpha)
8:30 GDP Q4
8:30 International trade in goods
8:30 Personal Income and Outlays
10:00 Reuters/UofM Consumer Sentiment
10:15 Fed’s Powell and Williams: “Fed Communication Away from the Zero Lower Bound”
11:30 Results of $28B, 7-Year Note Auction
1:00 PM Baker-Hughes Rig Count
1:30 PM Fed’s Reserve Gov. Lael Brainard speech
S&P e-mini (ES) held support at 1922.75 early in session, then rallied to reach 1949.73 projected HOD target outlined in prior DTS Report 2.25.16. It was a perfect Cycle Day 3 (CD3) with expected SPILL UP.
In overnight trade price has extended gains to 1968.75, within 1-tic of today’s Cycle Day 1 Maximum Penetration Level. Further upside beyond this level may be increasingly difficult.
Today is Cycle Day 1 (CD1)…NORMAL SPILL DOWN…Price having extended gains during overnight session to CD1 Max Penetration Level (1969.00) may have exhausted the buyers. Odds now favor at minimum a decline to absorb recent enthusiastic momo buying.
Range Projections and Key Levels:
HOD Range Projection = 1976.02; LOD Range Projection = 1940.73; CD1 Maximum Penetration Level = 1969.00; CD1 Maximum Violation Level = 1888.44; Cycle Day 1 Low = 1915.25; 3 Day Central Pivot = 1926.75; 3 Day Cycle Target = 1953.04; 10 Day Average True Range = 28.02.
**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 converts PH (1950.75), THEN initial upside objective is 1969.00 CD1 Max Penetration Level, followed by 1976.02 projected HOD target.
Scenario 2: Price has rallied to 1968.75, within 1-tic of CD1 Max Penetration Level…Odds favor a rejection and reversal from this level back down to test PH (1950.75). Violation and conversion of this level places buyers on the defensive and targets 1945.00 – 1940.00 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