Markets
S&P 500 futures fell 1.85% alongside global stocks as a crash in crude prices adds to the latest bout of market turbulence sparked by the COVID-19 pandemic. More anxiety was seen in the bond market, where yields on the 10-year Treasury note fell 5 bps to under 0.60%.
Source: Seeking Alpha https://seekingalpha.com/
Stock futures are down between 1.75% – 2.0% during overnight trade action
Source: https://www.investing.com/indices/indices-cfds
May WTI crude contracts (that expire today) crashed into negative territory for the first time ever on Monday, with markets awash in so much crude that storage space is becoming harder to find. Demand is down 30% worldwide amid travel restrictions and lockdowns to contain the spread of the coronavirus, while output cuts from the world’s largest producers came too late to the show. Hopes that things would fare better today have now been dashed, with WTI contracts for June tumbling as much as 42% overnight to $11.89/bbl.
Economic Calendar
10:00 Existing Home Sales
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 1…Price declined as expected for CD1, as selling pressure remained persistent throughout the day closing near lows of the Session.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into today’s Cycle Day 2…Selling momentum from prior session continued into overnight trade as price violated CD1 Low (2804.25). Recovery test failed to attract sufficient buyers and as such, selling momentum has re-accelerated, with price currently (as of writing) challenging 5-day low zone.
P – VA High = 2848 P – VA Low = 2810 P – POC = 2816
Bull Scenario: IF Bulls hold bid above 2765, THEN initial upside estimate targets 2785 – 2790 zone
Bear Scenario: IF Bears hold offer below 2765, THEN initial downside estimate targets 2750 – 2745 zone.
Range Projections and Key Levels (ES) June 2020 (M) Contract
HOD ATR Range Projection: 2818; LOD ATR Range Projection: 2770 3 Day Central Pivot: 2830; 3 Day Cycle Target: 2835; 10 Day Average True Range 82; VIX: 47
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price has violated CD1 Low (8687) and failed a recovery test. As such, selling momentum has re-accelerated and currently (as of writing) price is pushing ATR (3) 8593 level.
P – VA High = 88004 P – VA Low = 8714 P – POC = 8760
Bull Scenario: IF Bulls hold bid above 8655, THEN initial upside estimate targets 8675 – 8685 zone.
Bear Scenario: IF Bears hold offer below 8655, THEN initial downside estimate targets 8593 – 8570 zone.
Range Projections and Key Levels (NQ) June 2020 (M) Contract
HOD ATR Range Projection: 8772; LOD ATR Range Projection: 8593; 3 Day Central Pivot: 8766; 3 Day Cycle Target: 8766; 10 Day Average True Range: 232; VIX: 47
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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