Markets
China’s industrial profits returned to growth in the first two months of 2016, despite weakening business conditions and slowing economic growth. Profits in January and February combined rose 4.8% to 780.7B yuan ($119.8B), following seventh straight months of decline. Meanwhile, China’s massive pension fund is likely to start investing in the mainland’s A-shares this year, a move that could see 600B yuan ($92.1B) moving into the country’s equity markets. The fund, which manages almost 90% of Chinese social security deposits, can currently only invest in treasuries and bank deposits.
In Asia, Japan +0.8% to 17134. Hong Kong closed. China -0.7% to 2958. India -1.5% to 24966.
In Europe, at midday, London closed. Paris closed. Frankfurt closed.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.4%. Crude +0.8% to $39.77. Gold -0.4% to $1217.
Ten-year Treasury Yield +2 bps to 1.91%
(Source: Seeking Alpha)
8:30 Personal Income and Outlays
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Survey
1:00 PM Results of $26B, 2-Year Note Auction
Early morning residual selling in prior session lead to a late afternoon rally which pushed price back above Cycle Day 1 Low (2025.25). New secure low (2012.25) is now in place for this Cycle. In overnight trade price is currently 2033.00, which qualifies for Positive 3 Day Cycle and is above Cycle Day 2 High (2029.00).
Today is Cycle Day 3 (CD3)…SPILL UP…Price is holding firm at 3 Day Pivot 2032.25 in pre-cash trade. There remains potential for higher if price converts 2038.00 SPOT.
Range Projections and Key Levels: June (M) Contract
HOD Range Projection = 2048.10; LOD Range Projection = 2021.65; CD3 Maximum Penetration Level = 2044.02; CD3 Maximum Violation Level = 1999.64; Cycle Day 1 Low = 2025.25; 3 Day Central Pivot = 2032.25; 3 Day Cycle Target = 2056.68; 10 Day Average True Range = 18.10.
**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 can hold above 2032.25, THEN convert’s 2038.00, upside targets 2044 – 2048 zone.
Scenario 2: Violation of CD1 Low (2025.25) sets in motion a continuation of last week’s selling targeting 2015 – 2013 STATX Zone. Average Cycle Decline measures 2008.21 downside potential.
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