Hurricane Harvey

Context: Energy markets were roiled overnight after Hurricane Harvey wreaked havoc along the U.S. Gulf coast, knocking out numerous refineries as well as some oil production. Crude futures fell by half a dollar to $47.42/bbl, as the refinery shutdowns could reduce demand for American oil. According to one of the world's largest reinsurers, damages from Harvey are estimated to be well below those from major storms that have hit New Orleans and New York.

/ES Value: YVAH 2448 YPOC 2446.50 YVAL 2442

/ES Plan: Friday closed balanced, after testing upper edge (CLVN 2453). Overnight inventory is slight bearish moving within Friday's value, struggling within 'Value Transition'. Overall, the outlook remains the same. Market must continue to keep value above CLVN 2441 in order to maintain the current bullish bias.

A) If the market moves above YVAL-CLVN 2442-2441 and remains above on subsequent tests, try to be a buyer leaning on steps 2442.50 towards CLVNs 2456-2461. Internals should be neutral or positive. Failure to take out ONH early is signal of weakness and potential for a move lower.

B) If market moves below CLVN 2441 and remains below on subsequent tests, try to be a seller leaning on steps 2437.50 2440.75 towards CHVN 2428 and CLVN 2419. Internals should be neutral or negative. Failure to take out ONL early is signal of rejection and potential for a move higher.

Tips: If you're using TOS, you can use $UVOLSP-$DVOLSP/$TVOLSP to measure buy-sell volume pressure. That % gives you the 'context' to figure out 'type of open'. VOL%>+-70% Open Drive (OD). VOL%>+-50% Open test Drive (OTD). VOL%<+-50% Open Rejection Reverse (ORR). VOL%<+-10% Open in Range (OIR). Figure out early the 'Opening Type' is key to play your trading plan.

Today's Economic Calendar

08:30 AM International Goods Trade
10:30 AM Dallas Fed Mfg Survey
01:00 PM 2-Year Note Auction
01:00 PM 5-Year Note Auction

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