Following a brief rebound on Monday, Dow futures fell over 500 points overnight, while contracts linked to the S&P 500 and Nasdaq slipped 1.1% and 0.5%, respectively. WTI crude oil (CO1:COM) is also off 3.6% to $67.42/bbl, while the 10-year Treasury yield fell 10 bps to 1.44%.
The downward trend followed a warning from Fed Chair Jerome Powell, which wrote in prepared testimony to Congress that Omicron and COVID, in general, could threaten the economy’s post-pandemic recovery.
8:55 Redbook Chain Store Sales
9:00 S&P CoreLogic Case-Shiller Home Price Index
9:00 FHFA House Price Index
9:45 Chicago PMI
10:00 Consumer Confidence
10:00 Powell testifies before Senate Banking Committee
10:30 Fed’s Williams Speech
3:00 PM Farm Prices
***New: PTG Trading Room Chat Log’s Link
Prior Session was Cycle Day 2 (CD2): Prices rebounded from deep holiday selloff as initial fears driven by the new Transformer known as “Omicron.” Range was 81 handles on 1.943M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price has given back prior session’s gains as overnight decline pushed down 85 handles. Currently price is trading near 4610 and within prior 2-day value zone. With the Volatility Index (VIX) in the mid-twenties, embrace the volatility, but be sure to properly manage your trade risk. Trader’s primary responsibility is risk management and preservation of capital. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4610, initially targets 4622 – 4630 zone.
2.) Price sustains an offer below 4610, initially targets 4595 – 4590 zone.
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4653 PVA Low Edge = 4621 Prior POC = 4638
Range Projections and Key Levels (ES) December 2021 (Z) Contract
HOD ATR Range Projection: 4728; LOD ATR Range Projection: 4709; 3 Day Central Pivot: 4656; 3 Day Cycle Target: 4638; 10 Day Average True Range 31; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price has given back approximately 50% of prior session’s gains, trading near 5-day POC (16303). Volatility is expected to remain elevated, so primary responsibility is risk management. Maintain your discipline and be patient for well structured trade patterns. Prior range was 400 handles on 591k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 16435 PVA Low Edge = 16244 Prior POC = 16398
Bull Scenario: IF Bulls sustain a bid above 16303, THEN initial upside estimate targets 16355 – 16385 zone.
Bear Scenario: IF Bears sustain an offer below 16303, THEN initial downside estimate targets 16250 – 16235 zone.
Range Projections and Key Levels (NQ) December 2021 (Z) Contract
HOD ATR Range Projection: 16486; LOD ATR Range Projection: 16194; 3 Day Central Pivot: 16280; 3 Day Cycle Target: 16268; 10 Day Average True Range: 247; 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.”
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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