Markets
Investors need some time off after a topsy-turvy year, but things may not be better at the local amusement park. Fed Chair Jay Powell took the market on another rollercoaster on Wednesday, with a series of loop-the-loops aboard a ride known as the Dove-Hawk Twister. When all was said and done, the Dow dropped 500 points, while the S&P 500 and Nasdaq slumped 2.5% and 3.6%, respectively, after initially soaring on the Fed’s announcement (that came along with a 75 bps rate hike).
Economic Calendar
8:30 Initial Jobless Claims
8:30 Productivity and Costs
9:45 PMI Composite Final
10:00 Factory Orders
10:00 ISM Service Index
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 2 (CD2): Upside reaction to FED Decision quickly lead to reversal, which carried through to the closing bell, to notch a wide-range reversal day. Range was 147 handles on 2.127M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Selling is spilling over during overnight trade/pre-RTH as price is well below CD1 Low 3852 level. Price is on the precipice of a “failed cycle” unless CD1 can be recovered. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 3760, initially targets 3780 – 3785 zone.
Bear Scenario: Price sustains offer below 3760, initially targets 3740 – 3730 zone.
PVA High Edge = 3898 PVA Low Edge = 3833 Prior POC = 3847
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 3827; LOD ATR Range Projection: 3697; 3 Day Central Pivot: 3860; 3 Day Cycle Target: 3852; 10 Day Average True Range 98; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price is continuing the sell-down spilling over into overnight/pre-RTH trade action. Price is on the precipice of a “failed cycle” unless CD1 Low (11288) is recovered. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 10909, THEN initial upside estimate targets 10996 – 11020 zone.
Bear Scenario: IF Bears sustains offer below 10909, THEN initial downside estimate targets 10823 – 10781 zone.
PVA High Edge = 1420 PVA Low Edge = 11214 Prior POC = 11270
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 11191; LOD ATR Range Projection: 10657; 3 Day Central Pivot: 11328; 3 Day Cycle Target: 11288; 10 Day Average True Range: 398; VIX: 26
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.
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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 SHOWN6.22.22