Markets
The Federal Reserve is expected to keep interest rates unchanged today amid concerns about a U.S. hiring slowdown and Britain’s possible exit from the EU. However, there will be a lot more for traders to scour than the standard 2 p.m. statement, including economic projections and the famous dot plot. Janet Yellen’s press conference could also provide clues on the health of the economy, the trajectory of hikes and the impacts of a Brexit.
“Central banks are losing control and they don’t know what to do,” Jeffrey Gundlach said ahead of the FOMC announcement. “The Fed is confused and their confusion spills into investor psychology… it seems every other week the message is different. They’ve turned into the Zombie Fed.” The bond guru also noted it was a “dangerous price appreciation game” to purchase German Bunds at current levels and that gold and gold miners are still attractive
In Asia, Japan +0.4% to 15919. Hong Kong +0.4% to 20467. China +1.6% to 2887. India +1.3% to 26726.
In Europe, at midday, London +0.8%. Paris +1.4%. Frankfurt +1%.
Futures at 6:20, Dow +0.3%. S&P +0.2%. Nasdaq +0.2%. Crude -1% to $48.03. Gold -0.3% to $1284.20.
Ten-year Treasury Yield +2 bps to 1.63%
(Source: Seeking Alpha)
Economic Calendar
7:00 MBA Mortgage Applications
8:30 Producer Price Index
8:30 Empire State Mfg Survey
9:15 Industrial Production
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:00 PM FOMC Forecast
2:00 PM Chairman Press Conference
4:00 PM Treasury International Capital
PTG Trading
S&P e-mini (ES) continued its sell-down yesterday to 2055.00 which was projected LOD outlined in prior DTS Report 6.14.16. Successful test of low (2054.75) set up afternoon rally to close with bullish momentum.
In overnight trade price has pushed to retest PH (2072.75) where it has currently been rejected (at time of this writing). Price has also pushed above Cycle Day 1 Low (2068.75) and as such produced a Positive 3 Day Rally.
Today is Cycle Day 3 (CD3)…Positive Rally is in place, so Bulls will need to continue to absorb any additional selling today to keep this rally intact. Next major upside objective is to recapture 2076.25 3 Day Central Pivot and convert to upper support.
****NOTE: FED DAY today may keep an early lid on price action with fireworks following 2 pm release and news conference.
Range Projections and Key Levels: Sept (U) Contract
HOD Range Projection: 2076.00; LOD Range Projection: 2057.00; CD3 Max Penetration Level: 2081.00; CD3 Max Violation Level: 2045.00; Cycle Day 1 Low: 2068.75; 3 Day Central Pivot: 2076.25; 3 Day Cycle Target: 2095.00; 10 Day Average True Range: 16.23
**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 at or above 2063 handle, THEN initial upside objective is to clear and convert PH (2072.75) to upper support. Should this unfold further upside objectives are: 2076.25 – 2078 3D CPZ, then 2081.00 CD3 Maximum Penetration Level.
Scenario 2: Failure to convert PH (2072.75) and subsequent violation and conversion of 2063 handle opens door for Bears to press for lower prices. Key Support remains between 2055 – 2058 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!
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