The Federal Reserve is expected to keep interest rates unchanged today amid concerns about a U.S. hiring slowdown and Britain’s possible exit from the EU. However, there will be a lot more for traders to scour than the standard 2 p.m. statement, including economic projections and the famous dot plot. Janet Yellen’s press conference could also provide clues on the health of the economy, the trajectory of hikes and the impacts of a Brexit.
“Central banks are losing control and they don’t know what to do,” Jeffrey Gundlach said ahead of the FOMC announcement. “The Fed is confused and their confusion spills into investor psychology… it seems every other week the message is different. They’ve turned into the Zombie Fed.” The bond guru also noted it was a “dangerous price appreciation game” to purchase German Bunds at current levels and that gold and gold miners are still attractive
In Asia, Japan +0.4% to 15919. Hong Kong +0.4% to 20467. China +1.6% to 2887. India +1.3% to 26726.
In Europe, at midday, London +0.8%. Paris +1.4%. Frankfurt +1%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.2%. Crude -1% to $48.03. Gold -0.3% to $1284.20.
Ten-year Treasury Yield +2 bps to 1.63%
(Source: Seeking Alpha)
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Empire State Mfg Survey
9:15 Industrial Production
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
4:00 PM Treasury International Capital
S&P e-mini (ES) continued its sell-down yesterday to 2055.00 which was projected LOD outlined in prior DTS Report 6.14.16. Successful test of low (2054.75) set up afternoon rally to close with bullish momentum.
In overnight trade price has pushed to retest PH (2072.75) where it has currently been rejected (at time of this writing). Price has also pushed above Cycle Day 1 Low (2068.75) and as such produced a Positive 3 Day Rally.
Today is Cycle Day 3 (CD3)…Positive Rally is in place, so Bulls will need to continue to absorb any additional selling today to keep this rally intact. Next major upside objective is to recapture 2076.25 3 Day Central Pivot and convert to upper support.
****NOTE: FED DAY today may keep an early lid on price action with fireworks following 2 pm release and news conference.
Range Projections and Key Levels: Sept (U) Contract
HOD Range Projection: 2076.00; LOD Range Projection: 2057.00; CD3 Max Penetration Level: 2081.00; CD3 Max Violation Level: 2045.00; Cycle Day 1 Low: 2068.75; 3 Day Central Pivot: 2076.25; 3 Day Cycle Target: 2095.00; 10 Day Average True Range: 16.23
**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: IF price holds at or above 2063 handle, THEN initial upside objective is to clear and convert PH (2072.75) to upper support. Should this unfold further upside objectives are: 2076.25 – 2078 3D CPZ, then 2081.00 CD3 Maximum Penetration Level.
Scenario 2: Failure to convert PH (2072.75) and subsequent violation and conversion of 2063 handle opens door for Bears to press for lower prices. Key Support remains between 2055 – 2058 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
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