Crude futures are pushing closer to $50 a barrel, with U.S. oil hitting its highest in over seven months after API data suggested a larger-than-expected drawdown in U.S. inventories last week. Crude is also getting support by an overnight surge in U.S. equities, strong home sales and a series of oil outages around the world. Wildfires in Canada and a spate of violence in Nigeria have helped cut global crude supply by nearly 4M bpd this month.
In Asia, Japan +1.6% to 16757. Hong Kong +2.7% to 20368. China -0.2% to 2815. India +2.3% to 25881.
In Europe, at midday, London +0.7%. Paris +1%. Frankfurt +1.4%.
Futures at 6:20, Dow +0.4%. S&P +0.4%. Nasdaq +0.5%. Crude +1.1% to $49.17. Gold -0.6% to $1221.30.
Ten-year Treasury Yield flat at 1.86%
7:00 MBA Mortgage Applications
8:30 International trade in goods
9:00 FHFA House Price Index
9:45 PMI Services Index Flash
10:30 EIA Petroleum Inventories
1:00 PM Results of $13B, 2-Year FRN Auction
1:00 PM Results of $34B, 5-Year Note Auction
1:00 PM Fed’s Kaplan: Monetary Policy
We wrote in prior DTS Briefing Report 5.24.16 “Monday’s Session was quiet narrow range “inside day”, as volumes and range compressed. This action typically leads to expansion with the path of least resistance remains for an upside resolution.”
“Gap n Go” Breakout in prior session caught many a trader (yours truly) off guard, as these type openings are relatively infrequent in occurrence. Price strength ultimately pushed higher surpassing 3 Day Cycle Target and most aggressive Maximum Penetration Levels.
Today is Cycle day 3 (CD3)…Momentum has pushed price higher in overnight trade to reach STATX Zone (2082.50 – 2086.75). First sign of weakness would be a violation and conversion of prior high (2077.25).
Range Projections and Key Levels: June (M) Contract
HOD Range Projection: 2095.92; LOD Range Projection: 2063.08; CD3 Max Penetration Level: 2087.55; CD3 Max Violation Level: 2031.19; Cycle Day 1 Low: 2043.50; 3 Day Central Pivot: 2053.50; 3 Day Cycle Target: 2067.00; 10 Day Average True Range: 22.42
**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 above prior high (2077.25) and has reached upper STATX Zone (2082.50 – 2086.50). IF price holds above PH (2077.25) on any pullback, THEN continued upside potential remains intact. Max Penetration Level measures 2087.55.
Scenario 2: First sign of weakness (SOW) would be a violation and conversion of PH (2077.25)…IF this occurs, THEN initial target is 2070 SPOT. Below this level 2064.50 – 2063.00 comes into play.
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
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.
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