With risk aversion increasing globally in recent days, bonds are rallying. At the beginning of May, the yield on the 10-year Treasury was about 2.55%, but it’s now hovering around the 2.22% level, marking an over 30 bps move downward this month alone. Some analysts have also increased bets that the Fed will cut U.S. interest rates not once but twice this year, countering concerns about slowing global growth that have been inflamed by the worsening U.S.-China trade war.
In Asia, Japan -1.2%. Hong Kong -0.6%. China +0.2%. India +0.7%.
In Europe, at midday, London -1.4%. Paris -1.7%. Frankfurt -1.3%.
Futures at 6:20, Dow -0.8%. S&P -0.8%. Nasdaq -1%. Crude -1.4% to $58.32. Gold +0.5% to $1283.40. Bitcoin -2% to $8551.
Ten-year Treasury Yield -4 bps to 2.23%
Source: Seeking Alpha
7:00MBA Mortgage Applications
8:55Redbook Chain Store Sales
10:00Richmond Fed Mfg.
10:00State Street Investor Confidence Index
11:30Results of $18B, 2-Year FRN Auction
1:00 PMResults of $32B, 7-Year Note Auction
Today is Cycle Day 2 (CD2)…Price has fulfilled its lower Statistical Extreme Target (2787) from Cycle Day 1 Normal Decline. Bulls have their work cut-out to stem further selling and repel “Da Bears”. Recovery targets 2800.50 Cycle Day 1 Low.
On an associated side-note, we have been discussing in the Trading Room the heavy concentration of Put Volume and Open Interest with the 281…280…274 Strikes. Use the following link to access Opricot’s Options Graph: http://www.opricot.com/ticker/spy/optiongraphs
CD2 Range High = 2810.75 CD2 Range Low = 2882.25 CD2 Range Avg = 28.50
Scenario 1: IF Bulls hold bid above 2800, THEN initial upside potential targets 2810 – 2815 zone.
Scenario 2: IF Bears hold offer below 2800, THEN initial downside objective targets 2787 – 2782.25 statistical low range zone.
Range Projections and Key Levels (ES) June 2019 (M) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price has fulfilled its CD2 Average Violation Target at 7224.50. Bulls will need to hold price above this level to stem off further selling. Recovery targets 7280.25 Cycle Day 1 Low.
CD2 Range High = 7275.50 CD2 Range Low = 7238.75 CD2 Range Avg = 99.50
Scenario 1: IF Bulls hold bid above 7280.25, THEN initial upside potential targets 7314.50 – 7327.25 zone.
Scenario 2: IF Bears hold offer below 7280.25, THEN initial downside objective targets 7238.75 – 7224.50 zone.
Range Projections and Key Levels (NQ) June 2019 (M) Contract
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.”
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