U.S. stock index futures are at session lows two-and-one-half hours ahead of the open, with the S&P 500 and Nasdaq 100 down 0.5%, and DJIA down 0.4%.Shanghai’s 1.6% decline led Asia lower overnight, and Germany’s off 1.6% to lead Europe’s move into the red.Down alongside, naturally, is crude oil – off 2% to $38.98 per barrel. Gold’s off 0.6% to $1,217 per ounce. The 10-year Treasury yield is marginally lower at 1.875%.
(Source: Seeking Alpha)
Prior Session was textbook Cycle Day 1 (CD1) as expected decline unfolded with gap down open which bulls could not recover. Persistent selling was the theme right into MOC Sell Imbalances. Overnight trade has price pushing lower in search of new secure cycle low.
Today is Cycle Day 2 (CD2)…Violation of CD1 Low forces continued long selling until a new secure cycle low can be found. Possible levels to be mindful of are: 2016.25, 2013.25, 2008.50. Bulls will need to stabilize and reverse price back above CD1 Low (2025.25).
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2036.98; LOD Range Projection = 2008.52; CD2 Maximum Penetration Level = 2053.92; CD2 Maximum Violation Level = 2002.73; Cycle Day 1 Low = 2025.25; 3 Day Central Pivot = 2037.50; 3 Day Cycle Target = 2056.68; 10 Day Average True Range = 20.23.
**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 will need to find early buy response at or above 2016.25 as first line of possible support. IF this occurs, THEN reversal bounce targets CD1 Low (2025.25). Bulls will need to convert this level into upper support for higher price potential.
Scenario 2: Price has violated CD1 Low which is forcing additional selling…Downside momentum could possibly push lower to 2016.25, followed by 2013.25. Lower Range Projection measures 2008.52 and Average Cycle Decline.
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