With inflation being the Federal Reserve’s biggest worry, October’s Consumer Price Index has the potential to rattle markets again today. The headline number, released at 8:30 a.m. ET, is expected to increase 8% Y/Y, compared to 8.2% in September. Meanwhile, core CPI, which strips out the volatile prices of food and energy, is forecast to rise 6.5% Y/Y vs. the 6.6% pace seen in the previous month.
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Prior Session was Cycle Day 1 (CD1): Normal CD1 as price declined, establishing a new cycle low at 3750 as long liquidation hit the markets ahead of the CPI print. Prior range was 99 handles on 1.828M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Price is trading quietly during overnight trade activity as traders await the CPI print . Expectation is for potentially a wide range day, similar to recent sessions. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3750, initially targets 3775 – 3785 zone.
Bear Scenario: Price sustains an offer below 3750, initially targets 3735 – 3725 zone.
PVA High Edge = 3845 PVA Low Edge = 3778 Prior POC = 3801
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 3830; LOD ATR Range Projection: 3692; 3 Day Central Pivot: 3802; 3 Day Cycle Target: 3858; 10 Day Average True Range 95; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Cycle Day 1 Low was established at 10822. Normal for CD2 is for some consolidation, although with the CPI print, expectation is for wide swings similar to recent sessions.. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 10822, THEN initial upside estimate targets 10920– 10930 zone.
Bear Scenario: IF Bears sustains offer below 10822, THEN initial downside estimate targets 10765 – 10755 zone.
PVA High Edge = 11116 PVA Low Edge = 10927 Prior POC = 10985
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 11134; LOD ATR Range Projection: 10592; 3 Day Central Pivot: 10987; 3 Day Cycle Target: 11220; 10 Day Average True Range: 385; VIX: 26
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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