Trade Strategy 2.4.16

Markets
The relationship between stocks and the price of oil has been the subject of much investor discussion recently, and there are many ideas why this correlation (0.67) might exist. Despite ample supply and record-high U.S. crude inventories, wild swings in the crude market yesterday drove Brent and WTI back above $35 and $32 a barrel. Global stocks are taking to green again following the moves, while another influx of earnings reports gets ready to hit the markets.
In Asia, Japan -0.9% to 17045. Hong Kong +1% to 19183. China +1.5% to 2781. India +0.5% to 24338.
In Europe, at midday, London +1.4%. Paris +0.5%. Frankfurt +0.6%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +0.8% to $32.55. Gold +0.5% to $1147.10.
Ten-year Treasury Yield +2 bps to 1.9%
(Source: Seeking Alpha)

Today’s Economic Calendar

Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Productivity and Costs
8:30 Gallup Good Jobs Rate
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:30 EIA Natural Gas Inventory
4:30 Money Supply
4:30 Fed Balance Sheet

PTG Trading

So you wanted to become a futures trader? Are you having fun yet? Yesterday’s range was 47.25 handles which is above the 10 Day Average True Range of 38.47. It’s not so much the range as we have adjusted to wide swings, but the intra-day sentiment shifts…Can we even use the word “sentiment” when discussing algorithmic robots? Do the robots have any “feeling”? Probably not, but they have surely created lots of anxiety with many carbon-based life form traders.

Note: Correlation between S&P and Crude Oil (ES:CL) is currently 0.67 which is actually down from 0.97 a week ago…It’s funny that investors worldwide are increasing their chatter about this correlation, which has existed for some time…By the time they finally figure out the reason it won’t matter…But humans have a strong desire for reasons since we are supposed to be “rational beings” and reasons matter…Traders only have a strong desire to make money…reasons do not matter.

Today is Cycle day 3 (CD3)…NORMAL SPILL UP…There still remains room to upside to reach 1926.00, which is 3 Day Cycle Target. Yesterday’s reversal was certainly dramatic lead by strong Crude Oil rally…Battle for total dominance will continue within a very wide trading range marked by 1865.00 – 1940.25

Range Projections and Key Levels:

HOD Range Projection = 1944.50; LOD Range Projection = 1883.75; Central Pivot = 1895.00; 3 Day Central Pivot Zone = 1908.00 – 1910.00.

**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

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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 holds above 1908.00 and subsequently clear and convert 1922.50, THEN upside expansion targets 1926.00, 1932.50 followed by 1944.50.

Scenario 2: Violation and conversion of 1908.00 opens door to corrective pullback targeting 1901.25, followed by 1895.00 down to 1888.75.

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!

Good Trading…David

“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

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN

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