Outlook 08/09

Context: North Korea is "carefully examining" a strike on the U.S. territory of Guam after President Trump warned of "fire and fury" in response to further threats from the regime. Intelligence reports are suggesting Pyongyang has successfully developed a "miniaturized nuclear weapon" and has "up to 60 nuclear weapons" in its arsenal. The geopolitical tensions have sent global equities into the red, while safe havens climb, including gold and the yen.

/ES Value: YVAH 2481 YPOC 2472 YVAL 2468

/ES Plan: Yesterday left a bearish profile (PBT 2455). Overnight profile is balanced, moving below Yesterday's range/value. NorthKorea-Trump tension is a news-driven event so Scene of Crime (SoC) scenario comes into play. We've 2 options:

A) If market opens below YVAL 2468 and remains below that level on the subsequent tests, it is a clearly bearish signal, so try to be a sellers towards ONL, PBT 2455 and CLVN 2453. Internals should be neutral or negative. If the market begins to trade within yesterday's value area and volume increases at highs, it would be recommended to exit short positions. Then try to be a buyer towards GAP 2472 and SoC 2476.

B) If market market shows a bearish open but then fails (OTF) to go through ONL and begins to trade back with volume at highs increasing, it is a signal of rejection. Try to be a buyer. Internals should be neutral or positive. There is a strong tendency to rotate all the way through yesterday value area. If market begins to trade below ONL and volume increases, exit long positions.

Tips: Market just closed leaving a new ATH. It's an excess, enough to call a top? I've some doubts. Market just balanced last sequence. Excess means a decent spike 'out of balance'. What do I need to confirm today's action as a decent excess? Next test of upper edge of the range around 2480. If market fails going through that level, chances of a major reversal increases.

Today's Economic Calendar

10:00 AM Wholesale Trade
10:30 AM EIA Oil Inventories
01:00 PM Fed's Evans
01:00 PM 10-Year Note Auction

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

Subscribe to receive early outlook, plan and tips by email