Waiting to assess the impact of its entry into negative interest rates, the Bank of Japan kept its powder dry following the second day of its March policy meeting, but downgraded its assessment of the economy. Exports and production “have been sluggish due mainly to the effects of the slowdown in emerging economies,” while public expectations of future inflation have “recently weakened.” The central bank also maintained its pledge to increase base money at an annual pace of ¥80T ($700B) as widely expected, but clarified that money reserve funds would be excluded from the negative rates it introduced at the end of January.
In Asia, Japan -0.7% to 17117. Hong Kong -0.7% to 20288. China +0.2% to 2864. India -1% to 24551.
In Europe, at midday, London -0.6%. Paris -0.9%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.4%. S&P -0.6%. Nasdaq -0.4%. Crude -2.7% to $36.17. Gold -0.9% to $1234.
Ten-year Treasury Yield -2 bps to 1.93%
(Source: Seeking Alpha)
FOMC meeting begins
8:30 Empire State Mfg Survey
8:30 Producer Price Index
8:30 Retail Sales
8:55 Redbook Chain Store Sales
10:00 Business Inventories
10:00 NAHB Housing Market Index
4:00 PM Treasury International Capital
Monday was Cycle Day 3 (CD3) and was “iffy spill”…Which means that having reached Cycle Target price could trade in a confused fashion until reaffirming uptrend or begin reversal. Having failed to expand higher sets up the reversal scenario which dovetails and segways nicely into today’s Cycle Day 1 (CD1) normal spill down in search for secure cycle low support.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2021.20; LOD Range Projection = 1985.30; CD1 Maximum Penetration Level = 2028.53; CD2 Maximum Violation Level = 1968.75; Cycle Day 1 Low = 1958.00; 3 Day Central Pivot = 1996.50; 3 Day Cycle Target = 2007.00; 10 Day Average True Range = 24.70.
**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: June (M) 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: Price is currently below CD3 Low (2002.00)…IF price can recapture this level and convert, THEN retracement bounce targets 2008.75 Central Pivot. Any strength above this pivot measures 2015.25 – 2016.75 STATX Zone.
Scenario 2: Failure to convert back above CD3 Low (2002.00) continues the probe lower in search of new secure low support. Levels to be mindful of are: 1996.60 – 1994.50 down to 1987.50. LOD Range Projection measures 1985.30. Below this level opens trap door for long liquidation and range expansion back into last weeks zone between 1968 – 1978.
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