Chinese stocks climbed to a seven-month high today on hopes of a formal announcement regarding the Shenzhen-Hong Kong Stock Connect. “It has two positives: the first is it shows that this period of worry in Beijing about currency outflows has passed,” said Erwin Sanft, a regional strategist at Macquarie. “But in a more practical way, it opens up increased access to the China market.” The trading link could be announced as soon as this week and will be officially launched in December, according to the Hong Kong Economic Journal.
In Asia, Japan -0.3% to 16869. Hong Kong +0.7% to 22932. China +2.4% to 3125. India closed.
In Europe, at midday, London +0.3%. Paris +0.1%. Frankfurt +0.4%.
Futures at 6:20, Dow +0.2%. S&P +0.2%. Nasdaq +0.2%. Crude +0.5% to $44.69. Gold +0.2% to $1345.70.
Ten-year Treasury Yield flat at 1.51%
(Source: Seeking Alpha)
S&P e-mini (ES) has predominantly traded within 2172 – 2182 range this past week as summertime slowdown continues until at least after Labor Day. Just take a look at Volatility Index chart at link: $VIX.X which tells the main story.
Today begins a new Cycle Day 1 (CD1)…Norm is for some type of decline…Prior CD1 decline was short lived as dip buyers came right back in to absorb selling leaving short-sellers scrambling to minimize losses. Key for the Bulls will be to convert 2182 – 84 zone to hard upper support. Upper targets measure 2194 handle.
Range Projections and Key Levels: Sept (U) Contract
**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: September (U) 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: Bullish case is IF price clears and converts 2184 to support, THEN upside is open to 2194 handle.
Scenario 2: Bearish case will be to fail to push higher and conversion of 2180 to lower resistance. Should this unfold lower targets are 2177 handle, followed by 2173 LOD Range Projection.
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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