Today’s Federal Reserve meeting may be the most watched in recent years, with famed investor Paul Tudor Jones even calling it “the most important in Chair Jay Powell’s career.” With inflation gathering speed and the job market tightening, the FOMC will have to weigh the path for the country’s monetary policy – chiefly the federal funds rate target range (now at 0.0%-0.25%) and asset purchases that continue at a $120B monthly pace. Again, it’s widely expected that no tightening will occur this time around, but investors will be watching closely for any signals that the Fed is setting the stage to become less accommodative.
Investors will be focused on the central bank policymakers’ summary of economic projections, specifically the dot-plot charts showing expectations on when Fed officials expect interest rates to start rising. More than half of 51 economists surveyed by Bloomberg forecast the median of 18 officials seeing an interest rate hike during 2023, in contrast to the March dot-plot where the median expectation was for a 2024 liftoff. Fed watchers will also be parsing Powell’s comments on whether he softens his insistence that inflation is “transitory.”
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***Written 8 pm Tuesday evening for Wednesday’s trading for contribution to MrTopStep’s “The Opening Print” publication.
Tuesday’s Session was Cycle Day 3 (CD3): Textbook CD3 as price pushed above PH and fulfilled Penetration Targets before reversing back below PH, setting the stage for the decline during RTH. Range was 30 handles on 919k contracts exchanged. Three-Fourths of Contract Roll is complete.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline which began in CD3 is in-place at 4230. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4230, initially targets 4245 – 4250 zone.
2.) Price sustains an offer below 4230, initially targets 4218 – 4213 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistic covering 12 years of recorded tracking history.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet > > Cycle Day 1 (CD1)
PVA High Edge = 4242 PVA Low Edge = 4233 Prior POC = 4234
Range Projections and Key Levels (ES) Sept 2021 (U) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Price is trading inside prior value zone (14088 – 14014) during overnight, as traders are in a “holding-pattern” awaiting today’s Fed Announcement and Presser. Prior range was 154 handles on 374k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 14088 PVA Low Edge = 14014 Prior POC = 14062
Bull Scenario: IF Bulls sustain a bid above 14014, THEN initial upside estimate targets 14062 – 14088 zone.
Bear Scenario: IF Bears sustain an offer below 14014, THEN initial downside estimate targets 13970 – 13950 zone.
Range Projections and Key Levels (NQ) Sept 2021 (U) Contract
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!
“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.”
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