Outlook 08/07

Context: Crude lower as OPEC discusses conformity. Representatives from OPEC and non-member nations are gathering in Abu Dhabi to discuss poor conformity levels on their output cut agreement. According to Bloomberg data, compliance fell to 86% in July, the lowest level since January. As the producers discuss obstacles facing the participating countries, crude futures are down 1% to $49/bbl.

/ES Value: YVAH 2475 YPOC 2473 YVAL 2472

/ES Plan: Friday left a balanced profile. We're moving within Friday's range/value. Market continues to balance at highs within 2480-2462, and there is little to no indication of any strong sellers present. Overnight profile shows a bullish imbalance towards ATH 2480, so primary idea is still buying weakness:

A) If market holds above YVAL 2472-2471.50 (GAP), try to be buyer and scale into the long side towards YVAH 2475, ONH and ATH. If market shows 'one tick failure' at ONH or ATH, it's a signal of weakness, so try to sell failure. Internals should be neutral or negative.

B) If market begins to trade below YVAL 2472 and volume increases at lows, try to be a seller towards 2469 and CLVN 2462. If market shows 'one tick failure' at 2469 or 2462, it's a signal of rejection, so try to buy 'Back to Value'. Internals should be neutral or positive.

Tips: If you follow Market Internals, use ($UVOLSP-$DVOLSP/$TVOLSP). That gives you a decent % of cash market balance. If that % is greater than +50% or -50%, market could be a bullish or bearish trend day. If that % moves within -10% or +10%, market shows neutral bias.

Today's Economic Calendar

10:00 AM Labor market condition index
11:45 AM Fed's Bullard speech
12:30 PM TD Ameritrade IMX
03:00 PM Consumer Credit

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

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