After its meeting, the ECB announced rate cuts to its main refinancing rate and the deposit rate (to a -.20%). They also announced a new QE program to buy ABS and covered bonds. Apparently this was more of a surprise than I assumed it would be as the Euro fell sharply. On a continuous futures chart, 1.3022 is a 50% retracement of the 2012 to 2014 rally in the Euro so it’s testing an important support area. At his press conference ECB President Draghi did nothing to alleviate the bearish Euro sentiment. In US news, ADP reported private sector employment rose by 204K in August, slightly lower than the 220K forecast. Later this morning we get the August ISM services index; it is forecast to be down 1.2 to 57.5. At 9:30 AM is the weekly NG storage report (expect an injection of 70 bcf) and at 10 AM is the weekly EIA petroleum inventory report (crude stocks forecast to be down 1.0 million barrels. Tomorrow morning is the monthly employment report in the US; forecasts are for a gain of 230K in NFP and the unemployment rate is forecast to be unchanged at 6.1%. Continued strength in the USD will weigh on commodity prices.
Sept. eMini S&P Futures: There have been four consecutive days that have ended in a doji; will today break the streak? Holding above the 2003.00 area helps the bulls, with yesterday’s high of 2011.00 as the target. However, this isn’t a high conviction setup and I would look to go home flat ahead of tomorrow’s employment report.
Sept. eMini NASDASQ Futures: Taylor Trading Technique Buy day. Overnight there was a low violation buy (4062.50). Now we should watch for support at 4075; the Fibonacci retracement level at 4086.50 is first resistance.
Dec. T Bonds: TTT Sell day, which tells us to look for a two sided trade. However, with the daily trend down a break below the session low (138-20) could see downside follow through.
Sept. Euro: It was either a TTT Sell Short day or a breakout day; in either case the big selloff wasn’t a surprise. The question is what to do now? I don’t want to buy it however we need to find a setup before shorting. Watch post ECB highs of 1.3042 and 1.3053 as reference prices.
Sept British Pound: Another breakout setup; watch Wednesday’s low of 1.6439 as a pivot point this morning.
Dec. Gold: TTT Sell day. The failure to clear old low resistance at 1273.40 keeps the downside pressure on; I would consider shorting a break below the session low of 1267.60.
Dec. Cocoa: Good selloff out of a breakout setup. Trade or Fade (my breakout trade advisory) has the downside breakout level at 3127 with targets of 3103 and 3070.
Oct. Sugar: Sell Short day. Use last week’s swing low of 15.41 as a pivot point with the August low of 15.30 as the next reference price.
Dec. Cotton: Sell a break below the session low of 65.56.
Oct. Crude Oil: It’s a TTT Sell day and Wednesday was an inside day so there’s no clear TTT setup for today. If you want to trade crude I would look for a potential breakout trade after the inventory report today (it’s at 10 AM CT this week).
Nov. Soybeans: Consider buying if it rallies above the overnight high of 1021-2 or possibly 1012-4 for a standard TTT Buy day. In either case trade from the long side as a scalp only.
Dec. Wheat: TTT Buy day for a scalp only, watch the overnight low of 531-4 as a reference price.
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.
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