Outlook 08/14

Context: President Trump will call for his chief trade adviser today to investigate China's intellectual property practices and forced technology transfers, according to Politico. He had been expected to order a probe earlier this month, but the action had been postponed as the White House pressed for Chinese cooperation in reining in North Korea's nuclear program. Meanwhile, official gauges of retail sales, industrial production and fixed asset investment in China started Q3 on a downbeat note, with all three decelerating more than expected last month after outperforming in June.

/ES Value: YVAH 2443.50 YPOC 2439.50 YVAL 2438

/ES Plan: Friday closed balanced after hitting the support zone for a reversal (CHVN 2430). Overnight range (2441.50-2455.50) is bullish leaving a double digit gap on the open. We're moving above Friday's range/value, but struggling at CLVN 2453 zone, so we've 2 options:

A) If market moves above ONL-LVN 2450 and remains above that level on subsequent tests, it is a clearly bullish signal, so try to be a buyer towards ONH 2455, CLVN 2461 and GBT 2464. Internals should be neutral or positive. Failure to take out ONH early is signal of weakness.

B) If the market begins to trade below ONL-LVN 2450 and volume increases at lows, then try to be a seller towards ONL 2441.50 and GAP 2440.75 Internals should be neutral or negative.

Tips: Overnight inventory is long, 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

11:30 AM 3-Month Bill Auction
11:30 AM 6-Month Bill Auction

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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