Trade Strategy 4.20.16

Markets

Crude prices have fallen below $40 a barrel after Kuwaiti oil workers ended a three-day strike that had cut the OPEC member’s production by nearly half. Concerns about oversupply were further reinforced by API industry data that showed a 3.1M barrel U.S. inventory build last week, about double that expected by analysts. Bearish sentiment is also taking hold as traders continue to assess the impacts from the output freeze deal failure between major producers on Sunday. Oil futures -2.8% to $39.94/bbl.

In Asia, Japan +0.2% to 16907. Hong Kong -0.9% to 21236. China -2.3% to 2976. India +0.1% to 25844.
In Europe, at midday, London -0.5%. Paris flat. Frankfurt -0.1%.
Futures at 6:20, Dow -0.2%. S&P -0.2%. Nasdaq -0.2%. Crude -2.8% to $39.94. Gold -0.3% to $1250.20.
Ten-year Treasury Yield-1 bps to 1.77%

(Source: Seeking Alpha)

Today’s Economic Calendar
 7:00 MBA Mortgage Applications
10:00 Existing Home Sales
10:30 EIA Petroleum Inventories
PTG Trading
S&P e-mini (ES) opened above CD3 high (2088.75) and reached CD1 Max Penetration Level (2098.34) where price found resistance. We knew based upon Cycle Dynamics that odds favored returning back lower to at least test the CD3 high (2088.75), which is in-fact what occurred during prior session. Cycle Support is now marked at 2084.75.
Today is Cycle Day 2 (CD2)…NEUTRAL SPILL UP…Price successfully tested the CD1 Low (2084.75) in overnight trade and as such a small rally has begun. Price will need to exceed and hold above CD1 high (2098.50) to expand this Cycle’s Rally.
Range Projections and Key Levels: June (M) Contract

HOD Range Projection = 2106.08; LOD Range Projection = 2074.17; CD2 Maximum Penetration Level = 2109.78; CD2 Maximum Violation Level = 2065.57; Cycle Day 1 Low = 2084.75; 3 Day Central Pivot = 2081.75; 3 Day Cycle Target = 2110.68 10 Day Average True Range = 20.33.

**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

Click Here

 

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 CD1 High (2098.50), THEN initial upside is 2101.00…Further strength above this level expands rally targeting 2106.08, followed by 2109.78 – 2110.68 3 Day Cycle Rally Target.

Scenario 2: In initial Sign of Weakness (SOW) would be a violation and conversion of CD1 Low (2084.75)…IF this scenario unfolds, THEN initial downside measures 2081.75 – 2080.00 3 Day Central Pivot Zone. Below this zone targets 2075.00 – 2074.17 LOD ATR Range Projection.

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!

Good Trading…David

“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

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone. Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
CFTC RULE 4.41 –HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN

Leave a Reply