Markets
The market looks set for a lower open on Monday, with stock index futures down another 1% as investors display more nervousness about the Fed decision later in the week. The central bank is expected to raise interest rates by another three-quarters of a point, though there are calls for a 100 bps move, after the August CPI figure showed that inflation has not peaked yet. All of the major averages are coming off their worst week since June, as well as their fourth weekly loss in five weeks, while the benchmark S&P 500 (SP500) just broke below a key support level watched by many traders.
Economic Calendar
10:00 NAHB Housing Market Index
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S&P 500
Prior Session was Cycle Day 2 (CD2): Weakness persisted throughout this cycle day until the closing rotation, as price bounced closing out OPEX. Range was 52 handles on 2.588M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price weakness once again is the dominant direction during overnight activity. Price is currently below CD1 Low (3905) and would need to recover, otherwise it will become a failed 3 Day Cycle. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 3850, initially targets 3880 – 3885 zone.
Bear Scenario: Price sustains offer below 3850, initially targets 3835 – 3830 zone.
PVA High Edge = 3885 PVA Low Edge = 3860 Prior POC = 3870
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 3936; LOD ATR Range Projection: 3808; 3 Day Central Pivot: 3926; 3 Day Cycle Target: 3905; 10 Day Average True Range 90; VIX: 27
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price is trading below CD1 Low (11935.50) and would need to recover this level, otherwise forfeit a failed 3 Day Cycle. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11800, THEN initial upside estimate targets 11880 – 11900 zone.
Bear Scenario: IF Bears sustains offer below 11800, THEN initial downside estimate targets 11725 – 11695 zone.
PVA High Edge = 11888 PVA Low Edge = 11804 Prior POC = 11820
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 12144; LOD ATR Range Projection: 11598; 3 Day Central Pivot: 12052; 3 Day Cycle Target: 11937; 10 Day Average True Range: 351; VIX: 27
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