World stocks are flying higher as investors welcomed Fed Chair Janet Yellen’s “cautious” stance on raising U.S. interest rates. In a speech Tuesday, Yellen said global and financial uncertainties posed risks to the domestic economy and justified a slower path for rate increases. “She totally contradicted the four Fed presidents who spoke last week, and any chance of the April rate hike suggested by them is over,” said Mark Matthews, head of research at Julius Baer. Her dovish position also helped propel Wall Street indexes to their highest closing levels of 2016.
In Asia, Japan -1.3% to 16879. Hong Kong +2.2% to 20803. China +2.8% to 3000. India +1.8% to 25339.
In Europe, at midday, London +1.7%. Paris +2%. Frankfurt +1.7%.
Futures at 6:20, Dow +0.7%. S&P +0.7%. Nasdaq +0.8%. Crude +1.7% to $38.93. Gold +0.2% to $1239.40.
Ten-year Treasury Yield +1 bps to 1.82%
(Source: Seeking Alpha)
8:15 ADP Jobs Report
10:30 EIA Petroleum Inventories
1:00 PM Results of $28B, 7-Year Note Auction
3:00 Farm Prices
Markets were happy to hear the dovish tone from Fed Chair Janet Yellen during yesterday’s speech, given that other Fed Governors have inferred that rate hike could be as early as April. Fed Fund Futures are factoring in zero (0) probability of a hike in June…As such, the markets rallied higher to reach and slightly surpass 2056.68 3 Day Cycle Target.
Today is Cycle Day 2 (CD2)…Cycle Targets have been achieved, so this could make for an interesting trade…Momentum could indeed push price higher projection (2064.23)…Or simply fizzle-out and retreat back into prior days range. In either case, Bulls continue to dominate the trading landscape.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2064.23; LOD Range Projection = 2044.02; CD2 Maximum Penetration Level = 2058.86; CD2 Maximum Violation Level = 2007.51; Cycle Day 1 Low = 2019.25; 3 Day Central Pivot = 2031.00; 3 Day Cycle Target = 2056.68; 10 Day Average True Range = 17.48.
**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 2: IF price violates PH (2048.00) after clearing and converting in overnight trade, THEN this scenario sets up a potential reversal which would initially target 2044.02 (LOD Projection)…Weakness below this level opens trap door down to 2039.00 – 2034.25 Central Pivot Zone.
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