Markets
That didn’t last long. U.S. stocks pulled off a strong rebound yesterday, with the S&P 500 advancing 2.5% for its strongest showing since late May. However, persistent worries about inflation and a potential recession still remain a concern for investors, leading many to describe the rally as a “dead cat bounce.” Bear market blues quickly returned overnight, with the futures contracts linked to the S&P benchmark index falling 2%, meaning stocks have a very good chance of erasing all of Tuesday’s gains during today’s session.
Source: SeekingAlpha.com
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S&P 500
Prior Session was Cycle Day 2 (CD2): Markets did their best at a post holiday “relief-rally, with an opening gap and posting daily gains, though volumes were sub-par. Range was 73 handles on 1.278M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price is currently above CD1 Low (3661.50) pre-RTH, so all that is needed for Positive 3 Day Cycle is to trade above this level during cash trading hours, which appears likely. Market’s have given up their prior session gains, as the search for new balance continues. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 3710, initially targets 3730 – 3735 zone.
Bear Scenario: Price sustains offer below 3710, initially targets 3695 – 3690 zone.
PVA High Edge = 3781 PVA Low Edge = 3762 Prior POC = 3766
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
HOD ATR Range Projection: 3811; LOD ATR Range Projection: 3650; 3 Day Central Pivot: 3710; 3 Day Cycle Target: 3698; 10 Day Average True Range 118; VIX: 31
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price has relinquished their prior session relief-rally post holiday gains, with trading back to 3-Day Central Pivot Zone during overnight trade. Positive 3-Day Cycle Statistic to be fulfilled with trade above 11273 during cash session. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11390, THEN initial upside estimate targets 11440 – 11460 zone.
Bear Scenario: IF Bears sustains offer below 11390, THEN initial downside estimate targets 11350 – 11320 zone.
PVA High Edge = 11970 PVA Low Edge = 11569 Prior POC = 11620
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
HOD ATR Range Projection: 11744; LOD ATR Range Projection: 11160; 3 Day Central Pivot: 11402; 3 Day Cycle Target: 11682; 10 Day Average True Range: 424; VIX: 31
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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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