A new era of monetary policy is starting to hit investors in the face after previously estimating that any tightening would be limited and gradual. FOMC minutes released on Wednesday showed that officials were fully on board with a faster scale back of the central bank’s asset purchase program, which would give it greater flexibility to raise interest rates and could happen as soon as March. Stocks tanked on the news, with the Nasdaq ending the day down more than 3% for the worst start to a calendar year since the financial crisis
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Prior Session was Cycle Day 1 (CD1): Normal CD1 unfolded as selling spilled over into this session and accelerated following Fed Minutes release. Range was 98 handles on 1.777M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Price has pushed to lower CD2 Violation Zone during overnight trade activity, but has since bounced back to CD1 Low (4690). Bulls will need to stabilize price above this level to squelch any further selling momentum. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4690, initially targets 4705 – 4710 zone.
2.) Price sustains an offer below 4690, initially targets 4670 – 4665 zone.
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4788 PVA Low Edge = 4723 Prior POC = 4780
Range Projections and Key Levels (ES) March 2022 (H) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Tech Wreck unfolded for it’s second day of selling, pushing price down more than 3%. Prior range was 516.25 handles on 757k contracts traded. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 16250 PVA Low Edge = 15982 Prior POC = 16210
Bull Scenario: IF Bulls sustain a bid above 15715, THEN initial upside estimate targets 15753 – 15793 zone.
Bear Scenario: IF Bears sustain an offer below 15715, THEN initial downside estimate targets 15640 – 16620 zone.
Range Projections and Key Levels (NQ) March 2022 (H) Contract
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!
“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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