Trade Strategy 5.9.19

Markets

U.S. stock futures point to a lower open as trade tensions escalate. China’s vice premier arrives in Washington for trade talks even as the country warns that it will retaliate if President Trump makes good on his threat to boost tariffs on Chinese goods Friday. Hong Kong’s Hang Seng Index closed down 2.4%, and the Shanghai Composite Index fell 1.5% after China reported weaker-than-expected lending data for April. Major indexes are also falling in Europe. Crude oil, down 0.5%, also got caught up in the downdraft. Meanwhile, investors have turned to safe havens. The 10-year Treasury has rallied, pushing yield down almost 4 basis points to 2.45%. U.S. economic data on tap this morning include international trade, producer price index and wholesale trade.

In Asia, Japan -0.9%. Hong Kong -2.4%. China -1.5%. India -0.5%. 
In Europe, at midday, London -0.41%. Paris -1.26%. Frankfurt -0.74%. 
Futures at 6:20, Dow -0.83%. S&P -0.82%. Nasdaq -0.98%. Crude -0.52% to $61.80. Gold +0.27% to $1,284.90. Bitcoin +2.8% to $6,261. 
Ten-year Treasury Yield -3.7bps to 2.446%.

(Source: Seeking Alpha)  

Economic Calendar

http://mam.econoday.com/

8:30Initial Jobless Claims
8:30International Trade
8:30Producer Price Index
8:30Jerome Powell: “Renewing the Promise of the Middle Class”
10:00Wholesale Trade
10:30EIA Natural Gas Inventory
10:45Fed’s Bostic: Economic Outlook and Monetary Policy
1:00 PMResults of $19B, 30-Year Note Auction
1:15 PMFed’s Evans: “Renewing the Promise of the Middle Class”
4:30 PMMoney Supply
4:30 PMFed Balance Sheet

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S&P 500

Today is Cycle Day 3 …Although markets have fulfilled Positive 3 Day Cycle statistic, they are still mired with more aggressive selling on any rally attempt. Once again bulls will need to defend the overnight selling which has pushed price lower testing Cycle Day 1 Low (2862.50). On a weekly basis price has undercut four (4) prior lows leaving a “hanging-man” in it’s wake.

CD3 Range High = 2888.00          CD3 Range Low = 2855.50          CD3 Range Avg = 30.00

Scenario 1: IF Bulls hold bid above 2870, THEN initial upside target 2875 – 2878 zone.

Scenario 2: IF Bears hold offer below 2870, THEN initial downside target 2862.50 – 2855.50 zone.

Range Projections and Key Levels (ES) June (M) Contract

HOD  ATR Range Projection: 2893.00; LOD ATR Range Projection: 2850.50; Cycle Day 1 Low: 2862.50; 3 Day Central Pivot: 2896.00; 3 Day Cycle Target: 2901.00; 10 Day Average True Range 35.00; VIX: 21.17

Nasdaq 100 (NQ)

Today is Cycle Day 3…Although markets have fulfilled Positive 3 Day Cycle statistic, they are still mired with more aggressive selling on any rally attempt. Once again bulls will need to defend the overnight selling which has pushed price lower testing Cycle Day 1 Low (7581.25). On a weekly basis price has undercut four (4) prior lows leaving a “hanging-man” in it’s wake.

CD3 Range High = 7615.50         CD3 Range Low = 7554.50          CD3 Range Avg = 90.00

Scenario 1: IF Bulls hold bid above 7582, THEN initial upside potential targets 7600 – 7615 zone.

Scenario 2: IF Bears hold offer below 7582, THEN initial downside targets 7560 – 7555 zone.

Range Projections and Key Levels (NQ) June (M) Contract

HOD  ATR Range Projection: 7682.50; LOD ATR Range Projection: 7520.50; Cycle Day 1 Low: 7581.25; 3 Day Central Pivot: 7691.00; 3 Day Cycle Target: 7650.00; 10 Day Average True Range: 124.00; VIX: 21.17

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.

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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