Pre-Bell Futures Day Trading Strategy - 6 Nov 2024

Written By Alex Djahankhah

"Success in day trading isn’t about predicting every move; it’s about preparing for anything. Stay disciplined, keep your emotions steady, and remember: patience is a position too. The market rewards those who respect its rhythm."

Here's a detailed day trading strategy based on the data you provided and the recent market news. This strategy is tailored for the major futures contracts before the opening bell, focusing on analysis, insights, and actionable steps.

1. Market Overview

  • Economic Sentiment: Positive market momentum is reflected in significant gains across key futures. The Dow Jones, Nasdaq, S&P 500, and Russell 2000 futures all show substantial gains. The Dow’s 1200-point surge and similar rallies in other indices suggest investor optimism, likely fueled by geopolitical or economic news.

  • Treasury Yields: Yields are up across both 10-Year (4.459%) and 30-Year (4.651%) Treasury Notes, signaling a shift toward riskier assets, which could encourage equity buying.

  • Volatility: The VIX index is down significantly (-4.59 points), indicating reduced fear in the market, which aligns with the bullish momentum seen in equity futures.

  • Commodities: Gold futures (GC=F) are down sharply, indicating reduced demand for safe-haven assets, while Crude Oil (CL=F) futures are also experiencing a decline, which might influence energy and related sectors.

2. Technical Analysis

  • YM (Dow Jones Futures):

    • Resistance Levels: 43750, 44000

    • Support Levels: 43300, 42900

    • Indicators: Strong momentum with overbought conditions on RSI suggests caution near resistance levels.

  • NQ (Nasdaq Futures):

    • Resistance Levels: 20750, 20900

    • Support Levels: 20500, 20300

    • Indicators: Higher highs with strong volume; watch for a potential reversal if price fails to break above 20750.

  • ES (S&P 500 Futures):

    • Resistance Levels: 5950, 5980

    • Support Levels: 5880, 5840

    • Indicators: Bullish crossover on moving averages; potential pullback if 5950 is rejected.

  • RTY (Russell 2000 Futures):

    • Resistance Levels: 2425, 2450

    • Support Levels: 2380, 2350

    • Indicators: Bullish trend; a break above 2425 could signal further gains.

  • GC (Gold Futures):

    • Resistance Levels: 2700, 2730

    • Support Levels: 2650, 2620

    • Indicators: Bearish momentum; likely to test support levels if sentiment remains positive.

  • CL (Crude Oil Futures):

    • Resistance Levels: 71.5, 73.0

    • Support Levels: 69.0, 67.5

    • Indicators: Oversold territory; may see a rebound if it holds above support.

  • ZTN (10-Year Treasury Note):

    • Resistance Levels: 111.0, 112.5

    • Support Levels: 108.5, 107.0

    • Indicators: Downward trend with high volume; expect further declines if the risk-on sentiment continues.

  • ZTB (30-Year Treasury Bond):

    • Resistance Levels: 119.0, 120.5

    • Support Levels: 115.0, 113.5

    • Indicators: Sustained decline; yields likely to rise further.

3. Fundamental Analysis

  • Economic Data: Rising yields indicate confidence in growth, while equity markets gain from potential policy stability or corporate earnings growth. The dollar index rise suggests global demand for U.S. assets, supporting further equity gains.

  • News Insights: With Trump-related market moves and corporate announcements from companies like Dynacor, AMD, and Zijin Mining, there’s a sentiment boost for equities. Tech-heavy futures like Nasdaq may benefit more, given AMD’s potential market impact.

4. Trend Identification

  • Equities (YM, NQ, ES, RTY): Strong uptrend across all indices; preference for buying pullbacks.

  • Gold (GC): Downtrend; consider short positions if key supports break.

  • Crude Oil (CL): Near-term downtrend but potential bounce at support.

  • Treasuries (ZTN, ZTB): Continued downtrend as yields rise.

5. Trading Scenarios

  • YM (Dow Jones Futures)

    • Scenario 1: Buy near 43300 support, targeting 43750 resistance.

    • Scenario 2: Short if 43750 rejects, with a target back to 43300.

  • NQ (Nasdaq Futures)

    • Scenario 1: Buy above 20500 support, targeting 20750.

    • Scenario 2: Short if 20750 rejects, target 20500.

  • ES (S&P 500 Futures)

    • Scenario 1: Buy on pullback to 5880, targeting 5950.

    • Scenario 2: Short if 5950 rejects, aiming for 5880.

  • RTY (Russell 2000 Futures)

    • Scenario 1: Buy on a break above 2425, targeting 2450.

    • Scenario 2: Short if 2425 rejects, with a target back to 2380.

  • GC (Gold Futures)

    • Scenario 1: Short on a break below 2650, targeting 2620.

    • Scenario 2: Buy if 2650 holds, targeting 2700.

  • CL (Crude Oil Futures)

    • Scenario 1: Buy on a rebound at 69.0, targeting 71.5.

    • Scenario 2: Short if 69.0 breaks, aiming for 67.5.

  • ZTN (10-Year Treasury Note)

    • Scenario 1: Short on a break below 108.5, targeting 107.0.

    • Scenario 2: Buy if 108.5 holds, targeting 111.0.

  • ZTB (30-Year Treasury Bond)

    • Scenario 1: Short on a break below 115.0, targeting 113.5.

    • Scenario 2: Buy if 115.0 holds, targeting 119.0.

6. Volatility Insights

  • Equities: Lower VIX suggests lower intraday volatility, favoring trend-following trades over mean-reversion.

  • Commodities: Volatility in oil and gold suggests opportunities in short-term counter-trend setups, especially for gold due to its sharp decline.

  • Treasuries: Rising yields indicate potential sharp moves in bond futures; tread cautiously and expect volatility in response to news.

Conclusion

This analysis provides a strong framework for the day, with an emphasis on trending strategies in equities and counter-trend setups in commodities. The overall market sentiment leans bullish for equities, but caution is warranted near resistance levels. Utilize pullbacks for entry, keep an eye on Treasury yield trends, and manage risk proactively, especially if markets react to unexpected news.

Let me know if you'd like further customization for any specific futures contract or an update on any additional news that might impact the markets.

Day Trading Strategy Disclaimer

The content provided in this blog, including day trading strategies, technical analysis, and market insights, is for informational and educational purposes only. The information should not be construed as financial advice, investment recommendations, or an endorsement of any trading strategy. Trading futures, options, and other financial instruments carries a high level of risk and may not be suitable for all investors. Past performance is not indicative of future results.

You should thoroughly evaluate your financial situation and risk tolerance before engaging in any trading activities. It is advised that you consult with a licensed financial advisor or professional who can provide personalized investment advice tailored to your individual needs.

The author and publisher of this blog do not guarantee the accuracy, completeness, or timeliness of the information and will not be liable for any losses or damages, including, but not limited to, any loss of profit or investment, which may arise directly or indirectly from the use of or reliance on such information. By using this blog, you acknowledge and accept these terms and any inherent risks associated with trading.

Risk Warning: Leveraged trading can result in losses that exceed your initial investment. Please trade responsibly.

Alex Djahankhah https://Thefuturesplaybook.com
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