Markets
Futures for the three major U.S. stock averages rose overnight as investors considered the potential effects of the Omicron variant. Stocks previously sold off on Friday, with Wall Street suffering its worst day in more than a year, in an echo of panic that swept through markets when COVID was spreading in early 2020.
Other movement: WTI crude oil prices (CL1:COM) rebounded more than 5% this morning to retake the $70 level, while travel industry shares inched up after a bloodbath before the weekend. A flight to safety also saw the 10-year Treasury yield tumble 15 bps to 1.49% on Friday, but it regained the 1.54% level overnight.
Source: SeekingAlpha.com
Economic Calendar
10:00 Pending Home Sales
10:30 Dallas Fed Manufacturing Survey
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 1 (CD1): Wild ride for this cycle day as price declined over 2% on new worries on the impact of “omicron” (Sounds like a Transformer: cousin of the Decepticon). Where is Optimus Prime when the world needs him? Range was 132 handles on 1.863M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Price has rebounded during overnight trade activity to test prior session high (4643), and has since settled into a trading range between 4643 – 4620. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4630, initially targets 4645 – 4650 zone.
2.) Price sustains an offer below 4630, initially targets 4620 – 4615 zone.
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4622 PVA Low Edge = 4591 Prior POC = 4612
Range Projections and Key Levels (ES) December 2021 (Z) Contract
HOD ATR Range Projection: 4728; LOD ATR Range Projection: 4709; 3 Day Central Pivot: 4671; 3 Day Cycle Target: 4638; 10 Day Average True Range 31; VIX: 25
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price has recovered approximately 50% of the sharp decline on shortened holiday trading and currently trading near 5 day POC. Anticipate wider than average ranges with the VIX 25. Prior range was 425 handles on 600k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 16249 PVA Low Edge = 16075 Prior POC = 16202
Bull Scenario: IF Bulls sustain a bid above 16220, THEN initial upside estimate targets 16255 – 16275 zone.
Bear Scenario: IF Bears sustain an offer below 16220, THEN initial downside estimate targets 16170 – 16150 zone.
Range Projections and Key Levels (NQ) December 2021 (Z) Contract
HOD ATR Range Projection: 16262; LOD ATR Range Projection: 16028; 3 Day Central Pivot: 16275; 3 Day Cycle Target: 16268; 10 Day Average True Range: 225; VIX: 25
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 SHOWN