Outlook 08/10

Context: Pyongyang has hit back at threats from President Trump, branding his warnings "a load of nonsense" and stating only absolute force can work on him. It also announced plans to launch four rockets near Guam, saying preparations should be ready in a matter of days. In response, the Pentagon has prepared a detailed plan for a pre-emptive strike on North Korea's missile sites, should Trump order such an attack.

/ES Value: YVAH 2468 YPOC 2464.50 YVAL 2462

/ES Plan: Yesterday left a bearish profile (PBT 2455). Overnight profile is bearish, moving within Yesterday's range/value on a classic “look above and fail” on low volume. When there is a move above or below a balanced range and then moves back inside of balance, the odds favor a move to the opposing end of the balance area. We've 2 options:

A) If market moves below YVAH 2468 and remains below that level on the subsequent tests, it is a clearly bearish signal, so try to be a sellers leaning on 2468 or LVNs 2465.25-2466.25, towards ONL 2461, PBT 2455 and CLVN 2453. The fade setup is always the same. Failure to take out ONL early is a buy signal with stop either under ONL or Yesterday's low.

B) If the market begins to trade above YVAH 2468 and volume increases at highs, then try to be a buyer towards ONH 2474 and NK SoC 2478.

Tips: Overnight inventory is short, resulting in a gap of about 10 points. Gaps of above 10 points are routinely more difficult to trade in either direction as the large overnight move needs to be digested by the market, often causing choppy action.

Today's Economic Calendar

08:30 AM Initial Jobless Claims
08:30 AM Producer Price Index
09:45 AM Bloomberg Consumer Comfort Index
10:30 AM EIA Natural Gas Inventory
01:00 PM 30-Year Note Auction
02:00 PM Treasury Budget

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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