Markets
Global stocks are starting the week sharply lower, as concerns about tighter monetary policy and rising bond yields halt two months of calm summer trading. Some Fed members have been trying to convince markets that the September meeting would be “live” for a hike, even though futures only imply a one-in-four chance of a move. The sea of red follows Friday’s sell-off of all three major U.S. indices, which posted their biggest losses since Brexit.
With signals from the Fed jolting financial markets, traders will be closely watching the last of Fedspeak today before the Sept. 20-21 policy meeting. The remarks from Fed governor Lael Brainard and Atlanta Fed President Dennis Lockhart will be the last comments ahead of the central bank’s self-imposed week of silence. Fed Governor Daniel Tarullo said Friday he wouldn’t rule out the possibility of a rate hike.
In Asia, Japan -1.7% to 16672. Hong Kong -3.4% to 23290. China -1.9% to 3021. India -1.5% to 28353.
In Europe, at midday, London -1.4%. Paris -1.9%. Frankfurt -1.9%.
Futures at 6:20, Dow -0.7%. S&P -0.7%. Nasdaq -0.9%. Crude -2% to $44.95. Gold -0.5% to $1328.20.
Ten-year Treasury Yield +2 bps to 1.69%
(Source: Seeking Alpha)
Economic Calendar
8:00 Fed’s Lockhart speech
1:00 PM Results of $24B, 3-Year Note Auction
1:00 PM Results of $20B, 10-Year Note Auction
1:00 PM Fed’s Kashkari speech
1:00 PM Fed’s Reserve Gov. Lael Brainard speech
PTG Trading
Bears finally got the break they were looking for with last Friday’s 60 plus handle sell down. We opined in DTS Report 9.8.16 Scenario 2: ” Bears still need to produce a violation below 2175 – 2173 zone to get any meaningful decline…Today (CD1) would be a good opening for them to get it done.”
Average True Range (10) now stands at 16.20 from a low of near 10…What does this mean…Expect wider daily trading ranges as VIX has jumped back to near historical norms.
Today is Cycle Day 3 (CD3)…Price will need to clear back above 2116 handle get to any chance of a relief rally…Looking like a long-shot to get price back to Cycle Day 1 Low (2169.25). Price is currently trading in pre-cash near LOD ATR Range Projection (2101)…So this would be a good level to stage a rally attempt.
Range Projections and Key Levels: Sept (Z) Contract
HOD Range Projection: 2116.50; LOD Range Projection: 2101.00; Cycle Day 1 Low: 2169.25; 3 Day Central Pivot: 2161.50; 3 Day Cycle Target: 2189.75; 10 Day Average True Range: 16.20
**Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: September (Z) 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 2101 then clear and convert 2106 early to increase odds of some type of relief rally. Conversion of 2112 marker followed by 2116 would open door for this scenario unfolding. Initial upside target 2124, then 2133.
Scenario 2: IF price violates and converts 2101 to new lower resistance, THEN continuation move lower with long liquidation may unfold. Price is already at deep extreme STATX Zone (2104.00 — 2097.00)…Critical for this zone to illicit a buy response.
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