Trade Strategy 1.25.22

Markets

The volatility edition

Things are getting wild in equity markets as traders try to size up the latest outsized moves. A rowdy session on Monday saw the biggest Nasdaq comeback since 2008, as the index ended the day up 0.6% following a midday plunge of nearly 5%. Similar movement was seen with the Dow and S&P 500, which both ended the session in the green despite an earlier drop of 3.3% and 4% (at one point the S&P 500 even fell into correction territory).

Stock index futures are plunging again overnight. At the time of writing, the Dow is off more than 250 points, while contacts linked to the S&P and Nasdaq are down 1.3% and 1.9%, respectively.

Source: SeekingAlpha.com

Economic Calendar

FOMC meeting begins
8:55 Redbook Chain Store Sales
9:00 S&P CoreLogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
10:00 Consumer Confidence
10:00 Richmond Fed Mfg.
1:00 PM Results of $55B, 7-Year Note Auction
1:00 PM Money Supply

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

***New: PTG Trading Room Chat Log’s Link

S&P 500

Prior Session was Cycle Day 2 (CD2): Selling-spree continued into this AM Session, pushing price down in excess of 2%, flushing out margin call sellers. Afternoon Session saw a strong reversal, which pushed price to new highs for the day. In the PTG Live Trading Room, we commented on this potential: “PTGDavid :(1:18:04 PM) : Looking for bullish close…Up on the day reversal.” Range was 215 handles on 3.705M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): Price has traded back above CD1 Low (4381.25) during Globex, but needs to also trade at or above during RTH to fulfill 3-day cycle statistic. As such, estimated scenarios to consider for today’s trading.

1.) Price sustains a bid above 4350, initially targets 4385 – 4400 zone. 

2.) Price sustains an offer below 4350, initially targets 4330 – 4315 zone.

PVA High Edge = 4342       PVA Low Edge = 4338        Prior POC = 4278

Range Projections and Key Levels (ES) March 2022 (H) Contract

HOD  ATR Range Projection: 4435; LOD ATR Range Projection: 4300; 3 Day Central Pivot: 4421; 3 Day Cycle Target: 4416; 10 Day Average True Range  106; VIX: 32

Nasdaq 100 (NQ)

Today is Cycle Day 3 (CD3)…Price is trading back within prior value zone, holding above it’s P-POC level (14125) following yesterday’s extreme sell-off. Prior range was 876 handles on 1.303M contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.

Bull Scenario: IF Bulls sustain a bid above 14125, THEN initial upside estimate targets 14350 – 14395 zone.

Bear Scenario: IF Bears sustain an offer below 14125, THEN initial downside estimate targets 14000 – 13975 zone.

PVA High Edge = 14413       PVA Low Edge = 13975     Prior POC = 14125

Range Projections and Key Levels (NQ) March 2022 (H) Contract

HOD  ATR Range Projection: 14633; LOD ATR Range Projection: 14016; 3 Day Central Pivot: 14575; 3 Day Cycle Target: 14518; 10 Day Average True Range: 482; VIX: 32

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.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

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


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