In Europe, at midday, London -0.1%. Paris -0.4%. Frankfurt -0.7%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude +2.4% to $30.40. Gold -0.7% to $1189.40.
Ten-year Treasury Yield +3 bps to 1.76%
6:00 NFIB Small Business Optimism Index
8:55 Redbook Chain Store Sales
10:00 Wholesale Trade
10:00 Job Openings and Labor Turnover Survey
1:00 PM Results of $13B, 3-Year Note Auction
Monday’s trade was a continuation sell as long-liquidation and margin selling took main stage pressing lower until our projected target level (1824.25 – 1822.75) outlined in Scenario 2 of prior DTS Report 2.8.16. Strong rally during the last 30 minutes of session pushed price back to midpoint stemming further losses.In overnight trade price is oscillating between 1852.50 (Central Pivot) and 1832.50 SPOT.
Today is Cycle Day 3 (CD3)…SPILL UP…Bulls will need to absorb any additional selling that materializes and convert 1852.50 to push back above CD1 Low 1865.75 to turn in a Positive 3 Day Cycle. Violation of prior low (1821.75) forces more selling.
Range Projections and Key Levels:
HOD Range Projection = 1871.50; LOD Range Projection = 1817.50; CD3 Maximum Violation Level = 1806.75; CD3 Maximum Penetration Level = 1892.50; Cycle Day 1 Low = 1865.75; 3 Day Central Pivot = 1881.00; 3 Day Cycle Target = 1904.50; 10 Day Average True Range = 39.22.
**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 clear and convert 1852.50, THEN bulls have a shot to recapture CD1 Low (1865.75) for positive cycle…Should that occur, next objective is 1871.50, then 1878.75 – 1883.25 3-Day Central Pivot Zone.
Scenario 2: IF price fails to convert 1852.50 and subsequently violates and converts 1832.50, THEN a possible retest of PL (1821.75) may unfold…Failure to hold opens door for additional selling in search of a final secure 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