Global shares are holding steady as markets await the outcome of the U.S. Federal Reserve’s policy meeting. While no rate move is expected at the Fed’s gathering, it does include updates of members’ economic projections and a news conference with Chair Janet Yellen, events that have caused violent market reactions in the past. Analysts generally assume Fed projections for interest rates – widely known as the “dots” – will indicate only three hikes this year instead of four. Yet the market is pricing in just one move of 25 basis points for 2016.
In Asia, Japan -0.8% to 16974. Hong Kong -0.2% to 20258. China +0.2% to 2870. India +0.5% to 24682.
In Europe, at midday, London flat. Paris flat. Frankfurt +0.4%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +2.2% to $37.12. Gold +0.2% to $1233.70.
Ten-year Treasury Yield flat at 1.96%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Housing Starts
9:15 Industrial Production
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
Very quiet trading in prior session as market participants await the FOMC Policy decision release today at 2 pm. Price continues to consolidate recent gains as the 10 day Average True Range is now 21.33 which is closer to its long-term historical average.
Today is Cycle Day 2 (CD2)…NEUTRAL SPILL…Early expectation is for more “wait n see” mode ahead of FED announcement…Current 3 day range is 1995.00 – 2013.00 (June M). Price compression will lead to expansion, so remain patient, disciplined until high quality trade opportunity presents itself.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2025.83; LOD Range Projection = 1990.42; CD2 Maximum Penetration Level = 2018.19; CD2 Maximum Violation Level = 1972.48; Cycle Day 1 Low = 1995.00; 3 Day Central Pivot = 2004.50; 3 Day Cycle Target = 2026.88; 10 Day Average True Range = 21.33.
**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: IF price clears and converts PH (2010.00), THEN odds (84%) favor range expansion with initial objective 2018.19, followed by 2025 – 2027 zone.
Scenario 2: IF price violates and converts PL (1995.00), THEN downside range expansion may unfold, targeting 1990.42, followed by 1985.00 down to 1978.75. Max violation level for CD2 measures 1972.48.
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