New season begins

Context: "The U.S. is considering, in addition to other options, stopping all trade with any country doing business with North Korea," President Trump wrote on Twitter. While Pyongyang has a small impact on world trade flows, a few large economies, China, India, Russia and Pakistan do business with the isolated nation. The United Nations Security Council is also set to meet later today to discuss fresh sanctions against the Kim Jong-un regime.

/ES Value: YVAH 2478 YPOC 2475.50 YVAL 2475

/ES Plan: Yesterday was a light volume day and closed balanced. Overnight inventory is bullish moving few ticks below Friday range. North Korea nuclear test was a news-driven event so Scene of Crime (SoC) scenario comes into play. We've 2 options:

A) If the market moves above LVN-MID 2465 and remains above on subsequent tests, try to be a buyer leaning on steps 2468.25-2467-2465 towards ONH 2470.75 and NK SoC 2474. Internals should be neutral or positive.

B) If market moves below LVN-MID 2465 and remains below on subsequent tests, try to be a seller leaning on steps 2461-2465-2467 towards CLVNs 2456 and 2453. Internals should be neutral or negative.

Tips: August trading volume has been the lightest it’s been in three years, but September volume traditionally shows a double-digit jump in trading. After Labor Day a host of catalysts await traders returning from vacations that could rock the market and boost volumes considerably. Turmoil in Washington, North Korea, Tax Reform, Debt-Ceiling fight, Federal Budget, and FED plans to start reducing its $4.5 trillion balance sheet.

Today's Economic Calendar

10:00 AM Factory Orders
12:30 PM TD Ameritrade IMX
02:00 PM Gallup US ECI

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