Treasuries yields and the dollar spiked, gold sold off and stocks rose and fell towards the end of the session on Monday after Jerome Powell was nominated for another four-year term at the Federal Reserve. The central bank is now expected to maintain its current course on tapering economic support as it grapples with rising inflation and lingering economic impacts of the pandemic. Less dovish or hawkish monetary policies typically coincide with higher interest rates as the cost of borrowing increases due to a tightness in financial conditions.
8:55 Redbook Chain Store Sales
9:45 PMI Composite Flash
10:00 Richmond Fed Mfg.
11:30 Results of $24B, 2-Year FRN Auction
1:00 PM Results of $59B, 7-Year Note Auction
1:00 PM Money Supply
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Prior Session was Cycle Day 3 (CD3): Opening range breakout faded quickly once CD3 Penetration Level was fulfilled, as @NQ which had been leading the rally higher, sharply reversed direction, dragging down @ES. Mid-day consolidation also failed to hold bid and by settlement prices were markedly lower. Range was 66 handles on expanding 1.618M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Today begins a new cycle, with the Average Decline 4668 in-place. We’ll be looking for stabilization with potential for bounce/rally. CD1 range high projection measures 4683 handle. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4675, initially targets 4683 – 4689 zone.
2.) Price sustains an offer below 4675, initially targets 4666 – 4660 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4730 PVA Low Edge = 4701 Prior POC = 4715
Range Projections and Key Levels (ES) December 2021 (Z) Contract
HOD ATR Range Projection: 4728; LOD ATR Range Projection: 4710; 3 Day Central Pivot: 4698; 3 Day Cycle Target: 4689; 10 Day Average True Range; 31; VIX: 19.75
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Price has bounced from deep extremes fulfilling initial upside range projection (16358). We’ll be looking for stabilization following prior session’s sharp decline. Average Decline measures 16303.. Prior range was 403 handles on twice the normal volume 760k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 16672 PVA Low Edge = 16473 Prior POC = 16538
Bull Scenario: IF Bulls sustain a bid above 16365, THEN initial upside estimate targets 16380 – 16390 zone.
Bear Scenario: IF Bears sustain an offer below 16365, THEN initial downside estimate targets 16314– 16298 zone.
Range Projections and Key Levels (NQ) December 2021 (Z) Contract
HOD ATR Range Projection: 16485; LOD ATR Range Projection: 16203; 3 Day Central Pivot: 16504; 3 Day Cycle Target: 16380; 10 Day Average True Range: 211; VIX: 19.75
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.”
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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