Markets
Things are getting edgy as traders seek to assess the thinking of the Federal Reserve going into 2023. Chair Jay Powell is set to participate today in an International Symposium on Central Bank Independence hosted by the Sveriges Riksbank in Stockholm, Sweden. While the event, which will start at 9 a.m. ET, may not include any updates to the state of U.S. monetary policy, markets will still be hanging on to every one of his words.
Snapshot: Powell’s speech follows a solid jobs report for the U.S. economy. Wage growth is rising, but cooled enough to bring down inflationary pressures, while employers are still hiring – at a pace of 223,000 in December – but are slowing down from last year’s unsustainable figures. The unemployment rate also came in at 3.5%, marking its lowest level in decades.
Many hope the data shows that a soft landing is still possible, especially when taking into account other economic numbers. The Consumer Price Index will be released on Thursday and is forecast to show the sixth straight month of falling inflation (at a pace of 6.5%). According to CME’s FedWatch Tool, traders are now pricing in a 77.2% chance that the FOMC will only raise its key lending rate by 25 bps at the end of January, continuing to slow its pace of increases.
Economic Calendar
9:00 Jerome Powell Speech
10:00 Wholesale Inventories (Preliminary)
1:00 PM Results of $40B, 3-Year Note Auction
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 3 (CD3): Price rallied fulfilling cycle objectives, as well as TargetMaster and Gamma Zones at which time reversal unfolded, driving price lower, closing near low of day. Prior range was 63 handles on 1.648M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline for CD1 measures 3904 which is in-place following prior session’s “range-runner” reversal. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3895, initially targets 3915 – 3920 zone.
Bear Scenario: Price sustains an offer below 3895, initially targets 3875 – 3870 zone.
PVA High Edge = 3954 PVA Low Edge = 3911 Prior POC = 3935
Range Projections and Key Levels (ES) March 2023 (H) Contract
HOD ATR Range Projection: 3961; LOD ATR Range Projection: 3845; 3 Day Central Pivot: 3888; 3 Day Cycle Target: 3976; 10 Day Average True Range 70; VIX: 22
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Average Decline for CD1 measures 11090. Normal for CD1 is a decline to find a new secure cycle low. As such, estimated scenarios to consider for today’s trading. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11120, THEN initial upside estimate targets 11185– 11205 zone.
Bear Scenario: IF Bears sustains offer below 11120, THEN initial downside estimate targets 11090 – 11070 zone.
PVA High Edge = 11381 PVA Low Edge = 11214 Prior POC = 11361
Range Projections and Key Levels (NQ) March 2023 (H) Contract
HOD ATR Range Projection: 11364; LOD ATR Range Projection: 10935; 3 Day Central Pivot: 11050; 3 Day Cycle Target: 11418; 10 Day Average True Range: 270; VIX: 22
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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