It’s the first Monday in nearly a month that S&P 500 futures haven’t gone limit-down in reaction to alarming weekend news, though traders are still starting the week with caution.
Traders are now betting on production shutdowns to cope with the collapse in demand, triggering WTI crude prices to drop under $20/bbl overnight to levels not seen since 2002. A price war between Saudi Arabia and Russia has only compounded price problems with growing lock down measures from the coronavirus pandemic.
Source: Seeking Alpha https://seekingalpha.com/
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Friday’s Session was Cycle Day 1…Normal expectation for CD1 is a decline from the Cycle Day 3 High. Price fulfilled Average Decline Objective of 2526.25 and established Cycle low at 2505.25.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into today’s Cycle Day 2…During GLOBEX Session price violated CD1 Low (2505.25) finding initial buy response within the 3 Day Central Pivot Zone between 2455 – 2465. Overnight rally found initial resistance at P-VAH (2560) and currently trading near P-POC 2537.
Normal for CD2 would be to anticipate some “back n fill” consolidation trade holding above CD1 Low (2505.25). More bullish price action would be to clear & convert P-VAH. CD2 Range Target measures 2586 handle.
P – VA High = 2560 P – VA Low = 232520 P – POC = 2537
Bull Scenario: IF Bulls hold bid above 2530, THEN initial upside estimate targets 2560 – 2586 zone
Bear Scenario: IF Bears hold offer below 2530, THEN initial downside estimate targets 2505 – 2490 zone.
Range Projections and Key Levels (ES) June 2020 (M) Contract
Nasdaq 100 (NQ)
P – VA High = 7696 P – VA Low = 7592 P – POC = 7628
Bull Scenario: IF Bulls hold bid above 7600, THEN initial upside estimate targets 7650 – 7700 zone.
Bear Scenario: IF Bears hold offer below 7600, THEN initial downside estimate targets 7550 – 7500 zone.
Range Projections and Key Levels (NQ) June 2020 (M) Contract
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!
“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.”
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