Trade Strategy 4.28.16

Posted on by April 28, 2016

Markets

Futures lower after BOJ surprises by standing pat

Markets had been expecting the Bank of Japan to ease policy further – be it a deeper dive into negative rate territory and boosted asset purchases. When the bank did neither overnight, the Nikkei tumbled more than 3% and the yen soared by a similar amount.
  • The rest of Asia was little-changed, but Europe’s down more than 1%, and Dow and S&P 500 futures are lower by 0.8%. Buoyed by a 10% gain in Facebook after its earnings last night, Nasdaq 100 futures are down 0.5%.
  • The 10-year Treasury yield is lower by 1.5 basis points to 1.84%, gold is up a couple of dollars per ounce, and oil is flat.

Today’s Markets

In Asia, Japan -3.6% to 16666. Hong Kong -0.1% to 21347. China -0.1% to 9595. India -1.4% to 25699.
In Europe, at midday, London -0.9%. Paris -1.3%. Frankfurt -1.2%.
Futures at 6:20, Dow -0.8%, S&P -0.8%, Nasdaq -0.4%. Crude +0.2% to $45.41. Gold +0.7% to $1258.85.
Ten-year Treasury Yield -3 bps to 1.83%

(Source: Seeking Alpha)

Today’s Economic Calendar
 8:30 GDP Q1
8:30 Initial Jobless Claims
9:45 Bloomberg Consumer Comfort Index
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
11:30 Results of $15B, 2-Year FRN Auction
1:00 PM Results of $28B, 7-Year Note Auction
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
PTG Trading
S&P e-mini (ES) made a failed attempt at an upside expansion of the current range (2091 – 2071) which setup a strong reversal into the overnight trade session. Price is currently trading near support (2071) which has contained previous selling. Violation and conversion of this level has bearish implications. Average True Range (10) has compressed to 14.40 handles, so we need to be on high alert for new directional range expansion.
Today is Cycle Day 2 (CD2)…NEUTRAL…Price remains locked between 2091 – 2071 range…Trade has been challenging recently as each push higher or lower has been “false-starts”, trapping both bulls and bears. We remain neutral until there is a clear directional break.
Range Projections and Key Levels: June (M) Contract

HOD Range Projection = 2088.85; LOD Range Projection = 2075.65; CD2 Maximum Penetration Level = 2103.38; CD2 Maximum Violation Level = 2058.23; Cycle Day 1 Low = 2076.25; 3 Day Central Pivot = 2085.00; 3 Day Cycle Target = 2098.68;10 Day Average True Range = 14.40.

**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.

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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 will need to hold above 2071.00 key support and clear and convert CD1 Low (2076.25) to repel angry bears. Upside targets 2085.00 3 Day Central Pivot.

Scenario 2: Violation and conversion of 2071.00 opens trap door forcing selling with initial target 2065.25 down to 2058.23 Lower STATX Zone and CD2 Max Violation Level.

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!

Good Trading…David

“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.
CFTC RULE 4.41 –HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN

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