The rally in oil prices is taking a breather after yesterday’s historic 14.7% gain, with October WTI down 1.8% to $61.80/bbl. Investors are awaiting clarity on how long it’ll take Saudi Arabia to restore output that was cut in half by the attacks on its production facilities as Aramco (ARMCO) grows less optimistic about a quick recovery. The state-owned operator may face weeks or months before the majority of output is restored, but other nations, including the U.S., could offset supply losses if the disruption lasts longer than initially expected.
Traders are still in risk-off mode due to the surge in oil prices and associated geopolitical concerns, though U.S. stock index futures are pointing to an only modestly lower open, currently down 0.2%. The FOMC will also start its two-day policy meeting this morning against the backdrop of fading hopes for an interest rate cut. The Fed Funds Futures market on Monday was pricing in a 34% chance that the Fed will stay put on rates; the probability was zero a month ago and just 5.4% a week ago, according to the CME.
In Asia, Japan +0.1%. Hong Kong -1.2%. China -1.7%. India -1.7%.
In Europe, at midday, London +0.2%. Paris +0.1%. Frankfurt -0.2%.
Futures at 6:20, Dow -0.2%. S&P -0.1%. Nasdaq -0.2%. Crude -1.8% to $61.80. Gold -0.4% to $1505.40. Bitcoin -1.2% to $10175.
Ten-year Treasury Yield -2 bps to 1.83%
(Source: Seeking Alpha) https://seekingalpha.com/
Today is Cycle Day 3 …Price opened with a gap lower in prior session and as such odds favored recovery back to and/or above 3006 Cycle Day 1 Low. Opening Range saw buyers and price did in-fact bounce during the RTH Session but was unable to achieve the 3006 level until evening ETH Session, fulfilling the 3 Day Cycle Statistic. It was grueling but the cycle is positive.
Contract Rollover, FOMC Meeting and Middle East tensions have price essentially in a “holding pattern” until there is some clarity. Until then, expectation will be for choppy range-bound trade. Price is currently trading at 3000 5-day Point of Control.
CD3 Range High = 3020 CD3 Range Low = 2983.00 CD3 Range Avg = 38.25
Scenario 1: IF Bulls hold bid above 3000, THEN initial upside targets 3014 – 3020 zone.
Scenario 2: IF Bears hold offer below 3000, THEN initial downside targets 2988 – 2983 zone.
Range Projections and Key Levels (ES) December (Z) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 3…Price is currently range bound and has yet to recover Cycle Day 1 Low (7904). Bulls need to accomplish this objective today otherwise this cycle will fail. Odds still favor the positive cycle outcome.
CD3 Range High = 7910 CD3 Range Low = 7940 CD3 Range Avg = 135.00
Scenario 1: IF Bulls hold bid above 7875, THEN initial upside potential targets 7895 – 7910 zone..
Scenario 2: IF Bears hold offer below 7875, THEN initial downside targets 7840 – 7815 zone..
Range Projections and Key Levels (NQ) September (U) Contract
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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