The major averages are coming off their worst monthly performance since March amid surging coronavirus infections, extinguished stimulus talks and a slump for Big Tech following quarterly earnings reports. The Dow closed out October with a 4.6% loss, the S&P 500 and the Nasdaq fell 2.8% and 2.3%, respectively, while volatility last week saw the VIX “fear gauge” spike to a four-month high.
Traders seem a little more cheerful this morning as U.S. stock index futures climbed 1.5% to start the month, as the selloff leading up to Election Day may give the market less downside risk to a contested result.
While recent pressure on equity markets could be easing, oil prices slid on lingering worries that international lockdowns will sap energy demand. Off by nearly 6% overnight, crude futures have pared some losses, down 2.7% to $34.82/bbl. Libya and Iraq are also boosting their production, causing a rise in overall supply from OPEC+, despite having reduced quotas across its other members. While the group meets again on Nov. 10 and Dec. 1 to discuss policy, there doesn’t appear to be a great deal of leeway for further reductions.
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Friday’s Session was Cycle Day 2 (CD2): Price gyrated widely in search of balance and by end of session found value between 3230 – 3260 zone. Range was 71.25 handles on 2.300M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price opened Globex near the CD1 Low (3250.25) and rallied briskly, achieving 3 Day Cycle Target (3315), securing a Positive 3 Day Cycle Statistic. As such, there are two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3300, initially targets 3315 – 3322 zone.
2.) Price sustains an offer below 3300, initially targets 3285 – 3270 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Statistic covering 12 years of recorded tracking history.
PVA High Edge = 3260 PVA Low Edge = 3230 Prior POC = 3242
Range Projections and Key Levels (ES) December 2020 (Z) Contract
Nasdaq 100 (NQ)
PVA High Edge = 11100 PVA Low Edge = 10953 Prior POC = 10998
Bull Scenario: IF Bulls sustain a bid above 11145, THEN initial upside estimate targets 11190 – 11235 zone.
Bear Scenario: IF Bears sustain an offer below 11145, THEN initial downside estimate targets 11100 – 11055 zone.
Range Projections and Key Levels (NQ) December 2020 (Z) 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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