Markets
Wall Street sold off on Monday, led by a decline in energy, industrial stocks and other cyclicals, prompting the Dow to slide 650 points to record its worst week since September. Echoing the weakness, compounded with little hope of a stimulus package from Washington, U.S. stock index futures hugged the flatline in the overnight session.
More than one third of the S&P 500 index components, or 186 companies, are set to report Q3 results this week, including some of the top names in the index. Today’s lineup includes manufacturing behemoth’s 3M (NYSE:MMM) and Caterpillar (NYSE:CAT), healthcare giants Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY) and Merck (NYSE:MRK), as well as tech titans Microsoft (NASDAQ:MSFT) and AMD (NASDAQ:AMD). Sideshow? While net earnings are surprising to the upside, with the exception of a few misses, the market seems laser focused on the election, COVID-19 and any news related to stimulus talks.
Source: SeekingAlpha.com
Economic Calendar
8:30 Durable Goods
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 $54B, 2-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 1 (CD1): Price declined as expected for CD1, but exceeded the lowest statistical target (3366), before reversing and recovering back to VAH closing 3394.75. Range was 90.25 handles nearly 2x average of 51 on 1.922M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Price is marginally higher in overnight trade as three-fourths of today’s expected range is in-place. Normal for CD2 is for consolidation to find balance following prior trend day. As such, there are two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3405, initially targets 3418 – 3422 zone.
2.) Price sustains an offer below 3405, initially targets 3395 – 3390 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Statistic covering 12 years of recorded tracking history.
PVA High Edge = 3405 PVA Low Edge = 3356 Prior POC = 3384
Range Projections and Key Levels (ES) December 2020 (Z) Contract
HOD ATR Range Projection: 3440; LOD ATR Range Projection: 3359; 3 Day Central Pivot: 3428; 3 Day Cycle Target: 3388; 10 Day Average True Range 51; VIX: 32
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price has recovered back to CD2 Range Target (11553) during overnight trade. For today’s trading, there are two scenarios to consider.
PVA High Edge = 11695 PVA Low Edge = 11453 Prior POC = 11560
Bull Scenario: IF Bulls sustain a bid above 11553, THEN initial upside estimate targets 11586 – 11603 zone.
Bear Scenario: IF Bears sustain an offer below 11553, THEN initial downside estimate targets 11490 – 11478 zone.
Range Projections and Key Levels (NQ) December 2020 (Z) Contract
HOD ATR Range Projection: 11703; LOD ATR Range Projection: 11340; 3 Day Central Pivot: 11595; 3 Day Cycle Target: 11433; 10 Day Average True Range: 225; 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.
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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