Markets
U.S. stock futures are in negative territory pre-RTH
The front-month May WTI contract plunged as much as 23% overnight to under $15/bbl, the lowest level since March 1999, after losing almost a fifth of its value last week. Production cuts agreed by top producers are barely making a dent in the demand destruction wrought by COVID-19 as the world rapidly runs out of places to store crude. While the May contract expires tomorrow, adding to reasons for prices to crater, the June WTI contract also fell more than 7% to $23/bbl (the spread is usually around $0.50 – it’s now around $8-10).
Source: Seeking Alpha https://seekingalpha.com/
Economic Calendar https://www.investing.com/economic-calendar/
8:30 Chicago Fed National Activity Index
We’ll keep the “High Surf Warning” posted for the foreseeable future.
S&P 500
Prior Session was Cycle Day 3 (CD3): Bullish Gap vaulted price above CD2 RTH High fulfilling and exceeding this Cycle’s Objectives.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Objective for this cycle day is to “probe for a new secure low” from which to begin the next cycle’s rally.
Price failed to extend prior gains above previous CD3 Close (2869) and as such, this cycle’s decline has begun. Currently price has found initial buy response within 3 Day Central Pivot Zone (2813 – 2820). IF this zone is violated and converted to lower resistance, THEN lower levels are expected with CD1 Average Decline measuring 2769 – 2762 zone.
P-VA High = 2863 P-VA Low = 2825 P-POC = 2834
Bull Scenario: IF Bulls hold bid above 2821, THEN initial upside estimate targets 2831 – 2833 zone
Bear Scenario: IF Bears hold offer below 2821, THEN initial downside estimate targets 2807 – 2800 zone.
Range Projections and Key Levels (ES) June 2020 (M) Contract
HOD ATR Range Projection: 2888; LOD ATR Range Projection: 2801; 3 Day Central Pivot: 2816; 3 Day Cycle Target: 2895; 10 Day Average True Range 88.00; VIX: 42.00
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Price failed to extend prior gains above previous CD3 Close and as such, this cycle’s decline has begun. Currently price has found initial buy response within 3 Day Central Pivot Zone (8728 – 8700). IF this zone is violated and converted to lower resistance, THEN CD1 Average Decline measures 8631 handle.
P-VA High = 8850 P-VA Low = 8712 P-POC = 8754
Bull Scenario: IF Bulls hold bid above 8712, THEN initial upside estimate targets 8750 – 8760 zone.
Bear Scenario: IF Bears hold offer below 8712, THEN initial downside estimate targets 8656 – 8634 zone.
Range Projections and Key Levels (NQ) June 2020 (M) Contract
HOD ATR Range Projection: 8905; LOD ATR Range Projection: 8634; 3 Day Central Pivot: 8712; 3 Day Cycle Target: 8905; 10 Day Average True Range: 254; VIX: 42.00
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.”
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