Markets
Although the eurozone has its eyes set on fresh stimulus, the U.S. is reinforcing the case for a rate hike later this month. Fed Chair Janet Yellen said yesterday she was “looking forward” to a U.S. interest rate increase and she’s set to speak again today before the Joint Economic Council in Washington. “Rates in Europe and the United States will move in opposite directions for the first time in a long time which is being dubbed as ‘the great monetary divergence,'” announced Jim Bianco, president of Bianco Research. Besides Yellen’s testimony, there are also speeches today from Fed officials Loretta Mester and Stanley Fischer. U.S. Dollar Index +0.3% to 100.38. (Source: Seeking Alpha)
Chain Store Sales
7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
8:30 Gallup Good Jobs Rate
9:45 PMI Services Index
9:45 Bloomberg Consumer Comfort Index
10:00 Factory Orders
10:00 ISM Non-Manufacturing Index
10:00 Yellen testifies before the Joint Economic Committee
10:30 EIA Natural Gas Inventory
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
PTG Trading
S&P 500 e-mini reached prior Cycle Target of 2104.50 in early morning trade in yesterday’s session, but failed to expand beyond, setting up a perfect Cycle Day 1 (CD1) decline. We knew odds (72%) favored a decline should 2098 SPOT be violated. Violation did occur as downside selling accelerated as Crude Oil plummeted lower to test key $40 pb level. Price touched key 2075.50 SPOT and has since rallied higher in overnight trade back to key 2092.50 SPOT, neutralizing much of the decline.
Today is Cycle Day 2 (CD2)…NEUTRAL SPILL…Having rallied sharply off deep lows, price will need to find some firm footing within a highly volatile environment. Expectation today is for continued price agitation as traders absorb a plethora of economic and geo-political news events.
Odds of Rally > 10 = 84%; Odds of Rally > 20 = 45%; Average Range = 14.50; Max Average Range = 22.50; Possible HOD = 2101.50; Possible LOD = 2075.00.
***Note: The odds highlighted are NOT predictions or trade recommendations, rather a guide based upon historical observed occurrences.
Today’s Hypotheses: December (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: Sharp rally in overnight trade has pushed price up to 2094.50 resistance level…Price will need to clear and convert this level for additional upside thrust. Buy response is expected at or near 2083 Weekly Pivot and rotate around this fulcrum.
Scenario 2: Resistance is marked at 2094.50 SPOT…Expectation is for Sell response to materialize…Violation of 2083 SPOT opens door to further downside testing CD1 low (2075.00)…Violation of this level targets 2073.50 SPOT down to 2063 CD 2 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