Trade Strategy 2.25.21

Markets

Yields, reflation, stimulus, earnings

Another market record for 2021 was seen Wednesday as the Dow Jones Industrial Average surged 424 points to a new record close. Rotation players were also happy to see the index as the only major average in the green this morning, with contracts linked to the benchmark up 0.2%. While the S&P 500 and the Nasdaq also climbed 1% yesterday, futures trading shows them down 0.2% and 0.6%, respectively. Treasury yields climbed another 6 bps to 1.45%, while oil prices extended gains for a fourth session to reach the highest levels in more than 13 months.

Source: SeekingAlpha.com

Economic Calendar

8:30 Durable Goods
8:30 Initial Jobless Claims
8:30 GDP Q4
8:30 Fed’s Bostic Speech
10:00 Pending Home Sales
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
11:10 Fed’s Quarles: “Stress Test”
12:00 PM Fed’s Bostic Speech
1:00 PM Results of $62B, 7-Year Note Auction
4:30 PM Fed Balance Sheet

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

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

S&P 500

Prior Session was Cycle Day 2 (CD2): Early decline to test support was successful, leading to continuation cycle rally surpassing upside objectives. Range was 76 handles on 1.886M contracts exchanged.

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): We’ll mark today’s session as a “wild-card” since cycle objectives have been fulfilled. Failure to sustain a bid above prior high (3927.75) may induce some selling to absorb recent rally. As such, there are two estimated scenarios to consider for today’s trading.

1.) Price sustains a bid above 3928, initially targets 3948 – 3958 zone.

2.) Price sustains an offer below 3928, initially targets 3900 – 3890 zone.

*****3 Day Cycle has a 91% probability of fulfilling Positive Statistic covering 12 years of recorded tracking history.

PVA High Edge = 3928       PVA Low Edge = 3873         Prior POC = 3922

Range Projections and Key Levels (ES) March 2021 (H) Contract

HOD  ATR Range Projection: 3948; LOD ATR Range Projection: 3892; 3 Day Central Pivot: 3882; 3 Day Cycle Target: 3868; 10 Day Average True Range  42; VIX: 22

Nasdaq 100 (NQ)

Today is Cycle Day 3 (CD3)…Price is currently trading within prior value zone. Prior range was 376 handles on 656k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.

PVA High Edge = 13260       PVA Low Edge = 13070      Prior POC = 13218

Bull Scenario: IF Bulls sustain a bid above 13213, THEN initial upside estimate targets 13280 – 13300 zone.

Bear Scenario: IF Bears sustain an offer below 13213, THEN initial downside estimate targets 13150 – 13135 zone.

Range Projections and Key Levels (NQ) March 2021 (H) Contract

HOD  ATR Range Projection: 13380; LOD ATR Range Projection: 13119; 3 Day Central Pivot: 13213; 3 Day Cycle Target: 13044; 10 Day Average True Range: 235; VIX: 22

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


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