N.Korea H test

Outlook 09/22 North Korea threatened to detonate a hydrogen bomb in the Pacific Ocean, putting a damper on the first day of fall in the Northern Hemisphere. The warning from Pyongyang follows sanctions from the Trump administration on the regime. The yen jumped in comparison to the dollar, while Japan's Nikkei and South Korea's Kospi fell moderately on the day. A mild sell-off in China followed a downgrade of the country's sovereign credit by Standard & Poor's to go along with the North Korea escalation of rhetoric.

/ES Value: YVAH 2503 YPOC 2501 YVAL 2499

/ES Plan: Yesterday SP500 future closed lower, with market heavyweight Apple out of favor on concerns about its latest iPhones, while financials rose as investors reacted to rising expectations for a third interest rate hike this year. Overnight inventory is bearish after NK event leaving a balanced 'B' bimodal profile (LIS 2497) and moving below yesterday's narrow value, so we've 2 options:

A) If market moves below LIS 2497 with cash volume falling, try to be a seller leaning on 2497-2497.50 towards ONL 2492 CLVNs 2489-2485. Failure to breakdown ONL 2492 early is signal of a potential move back to YVAL 2499 and ONH 2501.

B) If the market moves above LIS 2497 with cash volume rising, try to be a buyer leaning on 2497-2497.50 towards ONH 2501 YVAH 2503 and Gap 2505. Failure to take out ONH 2501 early is signal of weakness.

Tips: North Korea nuclear test was a news-driven event so Scene of Crime (SoC 2501) scenario comes into play and overnight inventory shows a gap of 5-6 points, often more easy to be filled. Remember, any tweet from @realDonaldTrump or @POTUS will have market impact.

Today's Economic Calendar

09:15 AM ECB's VP Constancio speech
09:30 AM FED's George speech
09:45 AM PMI Composite Flash
10:00 AM Atlanta Fed's Business Inflation Expectations
01:00 PM Baker-Hughes Rig Count
01:30 PM FED's Kaplan speech

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

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