Markets (Top Stories)

There’s a lot on the plate for investors this week as they continue to work their way through earnings season. Headlines are now shifting from the big banks to mega-cap tech, with Tesla (TSLA) already kicking things off last week for the “Magnificent 7.” The major tech players have already witnessed big gains in 2023 from the artificial intelligence frenzy and their quarterly results could spark outsized impacts on the broader market.

Putting it in perspective: The five biggest companies in the S&P 500 – Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Amazon (AMZN) and Nvidia (NVDA) – represent about a quarter of the benchmark index’s market cap (three of them will report this week). Many hope that bumper results and a significant jump in year-over-year numbers will put their hefty weightings to work, helping make up for other industries that might be going through an earnings slump. In fact, one of the only reasons that earnings expectations for the S&P 500 are forecast to be flat this quarter is because of the Big 5. Without the mega-cap tech group, earnings on average for S&P 500 companies would be down 5%.

Source: SeekingAlpha.com

Economic Calendar

https://www.investing.com/economic-calendar/

S&P 500

Prior Session was Cycle Day 2 (CD2): Markets continued in “risk-off” mode closing near lows of the session. Geo-Political unrest and rising bond-yields are keeping buyers sidelined and hedging long positions. Prior range was 60 handles on 2.234M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): Price is currently below CD1 Low (4292.75) and needs to rally above this level during RTH to avert a failed three-day cycle. As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4265, initially targets 4275 – 4280 zone. 

Bear Scenario: Price sustains an offer below 4250, initially targets 4230 – 4225 zone.

PVA High Edge = 4291       PVA Low Edge = 4255         Prior POC = 4265

Range Projections and Key Levels (ES) December 2023 (Z) Contract

HOD  ATR Range Projection: 4311; LOD ATR Range Projection: 4197; 3 Day Central Pivot: 4314; 3 Day Cycle Target: 4355; 10 Day Average True Range  63; VIX: 21

Nasdaq 100 (NQ)

Prior Session was Cycle Day 2 (CD2): Markets continued in “risk-off” mode closing near lows of the session. Geo-Political unrest and rising bond-yields are keeping buyers sidelined and hedging long positions. Prior range was 242 handles on 831k contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): Price is currently below CD1 Low (14839.50) and needs to rally above this level during RTH to avert a failed three-day cycle. As such, scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 14705, initially targets 14800 – 14820 zone. 

Bear Scenario: Price sustains an offer below 14705, initially targets 14605 – 14600 zone.

PVA High Edge = 14812       PVA Low Edge = 14647     Prior POC = 14705

Range Projections and Key Levels (NQ) December 2023 (Z) Contract

HOD  ATR Range Projection: 14914; LOD ATR Range Projection: 14461; 3 Day Central Pivot: 14887; 3 Day Cycle Target: 15127; 10 Day Average True Range: 251; VIX: 21

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 SHOWN