China Report



Outlook 01/10: U.S. stocks indexes sunk on Wednesday after a report that China was reconsidering its stance on U.S. treasury purchases. Officials reviewing China's foreign-exchange holdings have recommended slowing or halting purchases of U.S. Treasuries, Bloomberg News reported on Wednesday, citing people familiar with the matter. If the reports turn out to be true and China no longer sees Treasuries as an attractive option, the repercussions could be significant as the country is one of the biggest holders of U.S. debt.

/ES Value: YVAH 2757 YPOC 2752.50 YVAL 2748

/ES Plan: Yesterday market closed leaving a balanced profile. Overnight inventory is bearish (GBT 2732) moving below yesterday's value after the China news driven event and that's open the gate for a return to scene of the crime (SoC 2752), so we've these options:

A) If market remains below LIS 2745 with bearish internals, try to be a seller leaning on 2745 towards ONL and LVN 2735 GBT 2732. Failure to breakdown ONL early is a signal of a strength.

B) If market starts to move above LIS 2745 with bullish internals, try to be a buyer leaning on 2745 towards YVAL 2748 and GAP-SoC 2752. Failure to take out YVAL early is a signal of weakness.

Tips: Remember, stick to a trading plan and a systematic process, don't try to seek perfection. Use buy/sell range zones, not absolute levels. Take trades according to your risk, your goal is to come back next day.

Today's Economic Calendar

10:00 Atlanta Fed's Business
10:00 Wholesale Trade
10:30 EIA Petroleum Inventories
01:00 PM 10-Year Note Auction
01:30 PM Fed's Bullard Speech

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

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