Markets
“Stocks skyrocket on stimulus hopes,” “tank after the Fed’s half-point cut” (could’ve done more?), then “soar again following Biden’s Super Tuesday success,” are some of the headlines we’ve seen over the last few days as market watchers try to assign reasons for the wild movement.
While there was more volatility overnight as Dow futures shot up another 561 points, the bottom line is that the market is still trying to find a floor and gauge how the coronavirus will impact various sectors of the economy.
Benchmark 10-year U.S. Treasury yields dropped below 1% on Tuesday and touched an all-time low of 0.906%, following the Fed’s first emergency move since the depths of the 2008 financial crisis. The central bank has only another percentage point, or 100 basis points, left to ease until it hits zero, triggering some speculation of quantitative easing.
Emergency rate cuts go global?
The European Central Bank and the Bank of England are likely to announce stimulus measures in the coming days after the U.S. Fed surprised with a large emergency rate cut
In Asia, Japan +0.1%. Hong Kong -0.2%. China +0.6%. India -0.6%.
In Europe, at midday, London +1.4%. Paris +1.3%. Frankfurt +1.2%.
Futures at 6:20, Dow +2.2%. S&P +2%. Nasdaq +2.1%. Crude +1.3% to $47.79. Gold -0.1% to $1643.10. Bitcoin -1.2% to $8751.
Ten-year Treasury Yield -7 bps to 0.95%
Source: Seeking Alpha https://seekingalpha.com/
Economic Calendar
8:15 ADP Jobs Report
9:45 PMI Services Index
10:00 ISM Non-Manufacturing Index
10:30 EIA Petroleum Inventories
2:00 PM Fed’s Beige Book
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 1 (CD1)…Price extended early rally as Federal Reserve instituted a surprise 50 bps rate cut, only to fade late in session to close near lows, producing a normal CD1 decline.
This leads us into today’s Cycle Day 2 (CD2)…Price found solid buy response within 3 Day Central Pivot Zone 2990 – 3000 and has rallied 70+ handles overnight to the upper end of prior value zone. Bulls have solid control with upside projections above 3100 targeting 3137 – 3150 zone. Volatility remains elevated, so be sure to use “Active Stop Strategy”.
Traders will be searching for a “relief-rally” or at minimum some price stabilization to stem further downside. VIX is currently 32 so with volatility elevated, be cautious with positioning and risk management.
ATR Range High = 3112.00 ATR Range Low = 2938.00 CD2 Range Avg = 41.00
Bull Scenario: IF Bulls hold bid above 3060, THEN initial upside estimate targets 3090 – 3100 zone
Bear Scenario: IF Bears hold offer below 3060, THEN initial downside estimate targets 3030 – 3020 zone.
Range Projections and Key Levels (ES) March 2020 (H) Contract
HOD ATR Range Projection: 3112.00; LOD ATR Range Projection: 2938.00; 3 Day Central Pivot: 3000.00; 3 Day Cycle Target: 3020.00; 10 Day Average True Range 111.00; VIX: 32.00
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD1)…Price is continuing it’s rally after finding solid buy response from 3 Day Central Pivot Zone (8554 – 8613). Upside projection have potential to carry price 8920 – 8960 zone.
ATR Range High = 8922.00 ATR Range Low = 8396.00 CD2 Range Avg = 147.00
Bull Scenario: IF Bulls hold bid above 8775, THEN initial upside estimate targets 8810 -8900 zone.
Bear Scenario: IF Bears hold offer below 8775, THEN initial downside estimate targets 8690 – 8650 zone.
Range Projections and Key Levels (NQ) March 2020 (H) Contract
HOD ATR Range Projection: 8922.00; LOD ATR Range Projection: 8396.00; 3 Day Central Pivot: 8583.00; 3 Day Cycle Target: 8700.00; 10 Day Average True Range: 344.00; VIX: 32.00
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.”
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