March’s stock market spring back is threatening to turn into a pullback. While April is typically one of the best months of the year, equities are remaining under pressure as oil slips to a one-month low, sentiment sours ahead of the Fed’s minutes tomorrow, and traders expect a poor beginning to Q2 earnings season next week. The attitude against riskier assets has also sunk the dollar to a fresh 17-month low against the yen. U.S. futures: Dow -0.8%. S&P -0.9%. Nasdaq -0.7%.
In Asia, Japan -2.2% to 15733. Hong Kong -1.6% to 20177. China +1.5% to 3053. India -2% to 24883.
In Europe, at midday, London -1.3%. Paris -2.1%. Frankfurt -2.2%.
Futures at 6:20, Dow -0.8%. S&P -0.9%. Nasdaq -0.7%. Crude -0.7% to $35.46. Gold +1.1% to $1233.10.
Ten-year Treasury Yield -5 bps to 1.72%
(Source: Seeking Alpha)
8:30 Gallup US ECI
8:30 International Trade
8:55 Redbook Chain Store Sales
9:45 PMI Services Index
10:00 Job Openings and Labor Turnover Survey
10:00 ISM Non-Manufacturing Index
S&P e-mini (ES) is trading this morning near Cycle Low (2035.25) following a meteoric on Friday to marginal new swing highs. Failure in prior session to expand on those gains with Crude oil on the down slide yet again emboldened Bears to press shorts and weak Bulls to bailout of positions.
Today is Cycle Day 3 (CD3)…Price has violated PL (2054.25) which has set up a condition of “forced selling” driving price all the way down to 2036 – 2038 zone, where this Cycle Rally began. As long as price opens above 2035.25 (CD1 Low) it will qualify for Positive 3 Day Rally, albeit, one of the weakest rallies in some time. Any bounces back to near 2056 will be viewed as “sell the bounce” level…Should Bulls be able to clear and convert this SPOT, then upside can continue.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2055.13; LOD Range Projection = 2038.12; CD3 Maximum Penetration Level = 2079.85; CD3 Maximum Violation Level = 2043.24; Cycle Day 1 Low = 2035.25; 3 Day Central Pivot = 2056.50; 3 Day Cycle Target = 2074.67; 10 Day Average True Range = 17.38.
**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 is currently trading pre-open just above Cycle Lows 2035.25 – 2038.00 zone. Price will need to hold above this zone during cash session and stabilize above 2043.25 for a reversal up…IF this can occur, THEN upside objective targets 2050.00 — 2052.25 STATX Zone.
Scenario 2: Violation of 2035.25 (CD1 Low) sets up additional “forced liquidation” of longs targeting 2028.00 – 2026.00 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