Outlook 07/18

Context: Republican leaders have given up on their effort to replace Obamacare after the defections of two more GOP senators left the party short of votes needed to pass the American Health Care Act. "Republicans should just repeal failing Obamacare now & work on a new Healthcare Plan that will start from a clean slate. Dems will join in!" President Trump wrote on Twitter. The news has knocked down the dollar, and add fuel to the Treasuries.

/ZB Update: Yesterday 30y Bond has tested Friday's VAH 153'00 and failed, selling towards VAL 152'19. Now /ZB shows in balance so we've 2 options: A) If market test yesterday's VAH 152'29 and holds, I become a buyer towards 154'00. More buying add fuel for a 'Back to Value' retracement on /ES. B) If market fails at 152'29, expect more selling towards yesterday's VAL 152'18. More selling helps /ES on the way for a new all time high.

/ES Value: VAH 2459.25 POC 2458.75 VAL 2456.75

/ES Plan: Current auction range from 6/29 CLVN 2402 and CHVN 2430 has been balanced. Yesterday's auction finally closed balanced on a low volume enviroment.

We are moving within yesterday's value and Globex is slight bearish, so first idea is to be a seller towards VAL 2456 and CLVN 2452. If market fails at 2452, I expect some more selling towards edge CVAH 2447. If edge 2447 fails, 'Back to Value' game starts leaning on that edge, towards half gap 2430. If market push above VAH 2459, we could see a new high at 2461 and excess towards Friday's balanced target 2471.

/ES Update: Current auction has been balanced at CLVN 2452, so I expect some bounce back to value VAL-POC 2455-56. We are moving below yesterday's value so if 2456-2455 fails, I expect more selling towards edge CVAH 2447. If edge 2447 fails, 'Back to Value' game starts leaning on that edge, towards half gap 2430.

Tips: Low volume numbers are support and resistance, they stop activity, and should be traded as such. High Volume areas represent value and are attractors. They serve as support and resistance the first time touched only. If not immediately rejected, you can expect to trade around for an hour. It’s where new moves start.

Today's Economic Calendar

08:30 AM Import/Export Prices
08:55 AM Redbook Chain Store Sales
09:30 AM GBP BOE's Governor Carney
10:00 AM NAHB Housing Market Index
04:00 PM Treasury International Capital

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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