Markets
The Federal Reserve struck a more balanced tone that ignited a relief rally in stocks and bonds yesterday, assuaging fears that even bigger rate hikes would slam the brakes on the economy. The FOMC raised the fed funds rate by 50 basis points to a range of 0.75%-1%, the biggest hike in 22 years.
But with one phrase Fed Chairman Jay Powell let the markets know that while inflation was the central bank’s chief concern, there was no need to use what some have called the “nuclear option.” The Fed “is not actively considering a 75-basis-point rate hike,” Powell said at the post-meeting press conference, although he also said 50-basis-point increases were on the table for the next couple of meetings.
Economic Calendar
8:30 Initial Jobless Claims
8:30 Productivity and Costs
10:30 EIA Natural Gas Inventory
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 1 (CD1): With the markets extremely cautious and hedged short in the event of negative Fed Meeting, which did not materialize, strong short-covering rally unfolded during the Presser. But with one phrase Fed Chairman Jay Powell let the markets know that while inflation was the central bank’s chief concern, there was no need to use what some have called the “nuclear option.” The Fed “is not actively considering a 75-basis-point rate hike,” Powell said at the post-meeting press conference. Prior range was 160 handles on 1.718M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Normal is for some ‘back n fill’ consolidation activity to balance previous session with CD1 Low marked at 4142.75. Expectation for continued relatively wide intra-day swings remains high, as traders will need to seek out new balance zone in the coming sessions. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4274, initially targets 4288 – 4292 zone.
Bear Scenario: Price sustains an offer below 4274, initially targets 4260 – 4250 zone.
PVA High Edge = 4225 PVA Low Edge = 4143 Prior POC = 4180
Range Projections and Key Levels (ES) June 2022 (M) Contract
HOD ATR Range Projection: 4385; LOD ATR Range Projection: 4175; 3 Day Central Pivot: 4178; 3 Day Cycle Target: 4265; 10 Day Average True Range 125; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Today we’ll be looking for a CD2 “normal” for price to stabilize recent wide-range volatility. CD1 low is marked at 12883. Prior range was 673 handles on 694k contracts traded. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 13435, THEN initial upside estimate targets 13500 – 13530 zone.
Bear Scenario: IF Bears sustain an offer below 13435, THEN initial downside estimate targets 13380 – 13340 zone.
PVA High Edge = 13155 PVA Low Edge = 12910 Prior POC = 13122
Range Projections and Key Levels (NQ) June 2022 (M) Contract
HOD ATR Range Projection: 13882; LOD ATR Range Projection: 13043; 3 Day Central Pivot: 13117; 3 Day Cycle Target: 13435; 10 Day Average True Range: 504; 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.”
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