Trade Strategy 1.8.20

Markets

Markets have recovered following initial panic after Iran launched more than a dozen ballistic missiles at bases housing U.S. troops in Iraq. Down by nearly 400 points overnight, DJIA futures have recouped all of their losses, while oil has given back gains and gold is off its highs.

In Asia, Japan -1.6%. Hong Kong -0.8%. China -1.2%. India -0.1%.
In Europe, at midday, London -0.5%. Paris -0.5%. Frankfurt -0.7%.
Futures at 6:20, Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude +0.1% to $62.77. Gold +0.5% to $1582.10. Bitcoin +5.7% to $8312.
Ten-year Treasury Yield -2 bps to 1.8%

Source: Seeking Alpha https://seekingalpha.com/

Economic Calendar

8:15 ADP Jobs Report
10:00 Fed’s Brainard Speech
10:30 EIA Petroleum Inventories
1:00 PM Results of $24B, 10-Year Note Auction
3:00 PM Consumer Credit

https://www.investing.com/economic-calendar/

***New: PTG Trading Room Chat Log’s Link

S&P 500

Today is a Cycle Day 1 (CD1), beginning of “new 3-day cycle” Normal expectation is for some magnitude decline with an average range decline measuring 22.25 handles or 3232.25.

Note: There will be times when trade action is bullish strong with shallow or even no decline, so we’ll need to make adjustments throughout the trade session. Determining whether the cycle day is unfolding “normal” or “aberrant” early in session will be “key” for tactical trade decisions.

Prior Session Cycle Day 3 (CD3) Price failed to continue the auction higher after fulfilling Cycle Target Objectives, which sets up potential deeper decline IF price stays below 3238 (Line-in-Sand) AND violates 3232 handle. From a Volume Profile perspective, there is a Bearish Imbalance that is in need of completion between 3230 – 3220 zone.

***BREAKING ALERT: 7:00 pm est Price has declined to 3196 CD1 STATISTICAL EXTREME VIOLATION LEVEL during Globex Trading on reports that US Airbase in Iraq was struck by missiles. Geo-Political Events are always a “wild-card” for normal Cycle expectations.

Bullish & Bearish Cycle Day 1 (CD1) Scenarios (Normal Conditions)

Bull Scenario: IF Price Clears and Converts Prior High (3254.50), THEN upside targets 3264 – 3267 CD1 Penetration Zone.

Bear Scenario: IF Price Violates and Converts Prior Low (3226.00), THEN downside targets 3213.50 – 3209.25 CD1 Violation Zone. Statistical Extreme Violation Level measures 3196 handle.

Range Projections and Key Levels (ES) March 2020 (H) Contract

HOD  ATR Range Projection: 3267.00; LOD ATR Range Projection: 3209.00; 3 Day Central Pivot: 3236.00; 3 Day Cycle Target: 3264.00; 10 Day Average True Range 23.50; VIX: 14.00

Nasdaq 100 (NQ)

Today is Cycle Day 1 (CD1)…Normal is for a decline measuring 8812 (FULFILLED & EXCEEDED). Average Range for CD1 is 95.00 handles. Odds of decline > 20 handles = 75% Odds of decline > 25 = 67%

CD1 Range High =8838.50           CD1 Range Low = 8774.00          CD1 Range Avg = 95.00

Bull Scenario: IF Bulls hold bid above 8830, THEN initial upside targets 8875 – 8895 zone.

Bear Scenario: IF Bears hold offer below 8830, THEN initial downside targets 8810 – 8795 zone.

Range Projections and Key Levels (NQ) March 2020 (H) Contract

HOD  ATR Range Projection: 8838.50; LOD ATR Range Projection: 8774.00 3 Day Central Pivot: 8830.00; 3 Day Cycle Target: 8917.00; 10 Day Average True Range: 87.50; VIX: 14.00

Trade Strategy: Our tactical trade strategy will simply remain unaltered…We’ll be flexible to trade both long and short side from Decision Pivot Levels. Continue to focus on Bull/Bear Stackers and Premium/Discounts. As always, remaining in alignment with dominant intra-day force increases probabilities of producing winning trades.

Stay Focused…Non-Biased…Disciplined  ALWAYS USE STOPS!

Good Trading…David

“Knowing is not enough, We must APPLY. Willing is not enough, We must DO.” –Bruce Lee

*****This trade strategy report is disseminated for “education only” and should not be viewed in any way as a recommendation to buy or sell futures products.”

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities. Only risk capital should be used to trade. Trading securities is not suitable for everyone.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 –HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN