Market were relatively quiet overnight until the release of the advance Q2 US GDP number, which came in at 4.0%, a full 1.0% above the average estimate. This overshadowed the earlier release of the ADP private payrolls report, which was a pretty miss (218K actual vs. 235K estimate). Now the financial markets wait for the 1 PM CT release of the communique of the FOMC meeting. It’s though that the Fed may tweak its language to reflect slightly higher inflation and strength in the labor market but it is not likely to start talking about its QE exit strategy until the September meeting. (We may see preliminary discussions when the minutes of this meeting are released.) The other surprises could come from dissent from the hawks. In other data, at 9:30 AM CT is the weekly EIA petroleum inventory report; crude oil stocks are forecast to have fallen by 1.0 million barrels last week.
Sept. eMini S&P Futures: Yesterday I wrote a blog post (read it here) describing yesterday as the Sell day of the Taylor Trading Technique cycle. Normally that would make today the Sell Short day in the cycle, however, the wide range selloff, low range close and ROC all make a rally (Buy day) more likely. I would look for a rally with Friday’s close of 1973.00 as the first rally objective. I would be cautious ahead of the FOMC announcement and look for a potential breakout move after its release.
Sept. eMini NASDAQ Futures: Monday was a doji day; will a rally above Tuesday’s high (3977.50) see upside follow through?
Sept. eMini Russell: Last night I labeled the Russell as a breakout candidate; that’s the type of trade we’ve seen thus far today. For now I would watch the Tuesday high of 1146.20 as a pivot point for the rally; 1152.30 would be the next rally target. As with the other stock indices; keep an open mind as to direction post-FOMC.
Sept. T Bonds: Good selloff from a TTT Sell Short day; watch Friday’s low of 138-07 as a reference price for continuing the selloff.
Sept Euro: It’s a “cover breakout sales” day so a TTT Buy day would be anticipated. That being said, I would look to buy until we see upside momentum- maybe a test of the session low (1.3372) or a move back over the 1.3400 area.
Dec. Gold: A “cover b.o. sales” day so a TTT Buy day was anticipated. There was a good low violation buy trade this morning; however the bulls need to keep it above the $1300 area. Gold is another market that could be affected by the FOMC.
Oct. Sugar: It’s on a (carryover) Buy day signal; the Tuesday low of 16.60 is the reference price. 16.70 is the first resistance.
Sept. Coffee: Breakout setup; reference prices on the upside are 182.20 and then 183.40. Don’t overstay breakout trades in coffee; recently moves seem to reverse quickly.
Sept. Crude Oil: “Cover b.o. sales” / TTT Buy day; the 101.80 area would be the first rally target. The weekly inventory report is out at 9:30 AM CT; we may see a breakout move after its release.
Oct. Live Cattle: Breakout setup; watch the Tuesday high of 159.72 as the reference price for an upside breakout.
Oct. Lean Hogs: Another breakout setup; watch the overnight high (106.75) and Tuesday low (105.17) as breakout reference prices.
Nov. Soybeans: TTT Buy day. Watch the Fib level at 1085-6 as a reference price this morning.
Sept. Wheat: It’s a “cover b.o. sales” / TTT Buy day. Because the daily trend is down, be careful about the long side- don’t try to catch a falling knife.
Essential Guide for Futures Swing Trading
In this guide, experienced trader and broker Scott Hoffman explains the trading methods he uses to analyze and trade the futures markets and to publish his trade advisory, Swing Trader’s Insight.
Risk Disclosure
PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
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TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
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