The European Central Bank has formally started its corporate sector purchase program, with the official buying list to be released on July 18. The criteria for the plan are as follows: Bonds have to be active, euro denominated, have an investment grade rating and be issued within the eurozone. Along with other measures such as ultra-cheap long term loans and government bond-buying, the program aims to kick-start the region’s economy and revive inflation.
In Asia, Japan +0.9% to 16831. Hong Kong -0.1% to 21298. China -0.3% to 2927. India flat at 27020.
In Europe, at midday, London flat. Paris -0.4%. Frankfurt -0.5%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +1.4% to $51.07. Gold +0.7% to $1255.20.
Ten-year Treasury Yield flat at 1.72%
(Source: Seeking Alpha)
S&P e-mini (ES) continued its assent higher to upper TargetMaster range level (2118) before pulling back a bit lower into settlement. In overnight trade price has successfully tested 2106 handle and has since bounced higher, currently trading 2114.00 pre-cash.
Today is Cycle Day 1 (CD1)…Normal price action would be for some type of decline from CD3 high (2118) today…Current uptrend has enough energy that any decline may be relatively shallow. Key Support marker is now the 2106 handle, so should this level be violated and convert to resistance, further decline would be anticipated. Range projections and key levels are outlined in the next section.
***Special Note: 10-Day Average True Range and Average Volumes continue to contract…This action suggests sellers have lost control and is supportive of current uptrend price swing.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection: 2120.00; LOD Range Projection: 2100.00; CD1 Max Penetration Level: 2127.00; CD1 Max Violation Level: 2095.00; Cycle Day 1 Low: 2082.75; 3 Day Central Pivot: 2105.50; 3 Day Cycle Target: 2109.50; 10 Day Average True Range: 13.65
**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 has successfully tested PL (2106.50) in overnight trade and has bounced back above Central Pivot (2111.50)…IF price holds above this level initial objective is to retest PH (2118.00)…should this level convert to support, THEN there is plenty of open space above to continue the current rally.
Scenario 2: Initial sign of weakness would have price trade back below and convert 2111.50…Should this occur, possible retest of 2106 handle would be expected to unfold. Any violation and conversion of this level to resistance opens door for said day type decline. Key zone below is 2104.75 – 2103.25 3 Day Central Pivot 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.”
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