After remaining mostly undecided since the market open, European shares are starting to feel the effects from Friday’s historic drubbing. According to Standard & Poor’s, $2.08T of stock market value were wiped out across the globe in the previous session, marking the largest ever daily sell-off in dollar terms. Today’s aftershocks are also weighing on U.S. equity futures and sent sterling down another 3.1%, as investors seek safety in gold and low-risk government debt.
In Asia, Japan +2.4% to 15309. Hong Kong -0.2% to 20227. China +1.5% to 2896. India flat at 26403.
In Europe, at midday, London -1.7%. Paris -1.9%. Frankfurt -1.9%.
Futures at 6:20, Dow -0.6%. S&P -0.6%. Nasdaq -0.8%. Crude -0.7% to $47.30. Gold +0.9% to $1333.70.
Ten-year Treasury Yield -10 bps to 1.47%
(Source: Seeking Alpha)
As dramatic a drop in price which occurred following the Brexit vote, it was not all unexpected, as many positioned (hedged) portfolios in-advance…This of course helps soften the blow…Now what will become important is the fall-out, as pundits will be making all sorts of predictions of the downstream cause and effect scenarios. This will of course will add to the current uncertainty, but will also create tremendous opportunity, for those that remain calm and cool under pressure.
Today is Cycle Day 1 (CD1)…Clearly the Cycle has been disrupted to say the least, as it may take some time to return to some normalcy with the Cycle. We will continue to respect key levels outlined below…Remain flexible, focused and disciplined.
Range Projections and Key Levels: Sept (U) Contract
HOD Range Projection: 2029.00; LOD Range Projection: 1995.00; CD1 Max Penetration Level: 2073.50; CD1 Max Violation Level: 1987.50; Cycle Day 1 Low: 2074.00; 3 Day Central Pivot: 2076.75; 3 Day Cycle Target: 2100.25; 10 Day Average True Range: 27.35
**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 a retest of Cycle Day 1 Low (1999.00), THEN odds favor a rally initially targeting 2020 handle. Above this level targets 2029.00 – 2032 handles. Central Pivot is marked at 2045.50.
Scenario 2: Violation and conversion of Cycle Day 1 Low (1999.00) to resistance increases potential for margin calls / long liquidation. Should this unfold lower expansion levels are 1995.00…1987.50 down to 1971.00 STATX Zone Low.
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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