Trade Strategy 12.1.22

Markets

Bear no longer

Volatility predicted, and volatility there was. A speech from Fed Chair Jay Powell on Wednesday sent markets flying amid signals that the central bank could begin slowing its aggressive interest rate increases. When the dust settled at the end of the session, the Nasdaq Composite (COMP.IND) closed up a whopping 4.4%, while the S&P 500 (SP500) and the Dow (DJI) finished the day ahead by 3.1% and 2.2%, respectively.

Source: SeekingAlpha.com

Economic Calendar

8:30 Initial Jobless Claims
8:30 Personal Income and Outlays
9:25 Fed’s Logan Speech
9:30 Fed’s Bowman Speech
9:45 PMI Manufacturing Index
10:00 Fed’s Kashkari Speech
10:00 ISM Manufacturing Index
10:00 Construction Spending
10:30 EIA Natural Gas Inventory
3:00 PM Fed’s Barr Speech
4:30 PM Fed Balance Sheet

https://www.investing.com/economic-calendar/

***New: PTG Trading Room Chat Log’s Link

S&P 500

Prior Session was Cycle Day 1 (CD1): Normal CD1 as price declined, establishing a new cycle low at 3942.75 by Noon. JPOW’s dovish speech sparked an explosive rally driving price to fulfill 3-Day Cycle Target (4075) all in same session. “Yes, Virginia, there is a Santa Claus” Prior range was a whopping 150 handles on 2.350M contracts exchanged. 

 …Transition from Cycle Day 1 to Cycle Day 2

This leads us into Cycle Day 2 (CD2): Price is trading in a relatively narrow range following prior session’s rally. Normal for Cycle Day 2 is for some consolidation with a bullish lean. As such, estimated scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4095 initially targets 4115 – 4125 zone. 

Bear Scenario: Price sustains an offer below 4095, initially targets 4075 – 4065 zone.

PVA High Edge = 4049       PVA Low Edge = 3932        Prior POC = 3960

Range Projections and Key Levels (ES) December 2022 (Z) Contract

HOD  ATR Range Projection: 4134; LOD ATR Range Projection: 4034; 3 Day Central Pivot: 3997; 3 Day Cycle Target: 4075; 10 Day Average True Range  62; VIX: 20

Nasdaq 100 (NQ)

Today is Cycle Day 2 (CD2)…Normal CD1 as price declined, establishing a new cycle low at 11497.75 by Noon. JPOW’s dovish speech sparked an explosive rally driving price to fulfill 3-Day Cycle Target(11991.50) all in same session. “Yes, Virginia, there is a Santa Claus.” Normal for Cycle Day 2 is for some consolidation with a bullish lean. Prior range was a whopping 580 handles on 476k contracts exchanged. 

Bull Scenario: IF Bulls sustains bid above 12086, THEN initial upside estimate targets 12141 – 12204 zone.

Bear Scenario: IF Bears sustains offer below 12086, THEN initial downside estimate targets 12016 – 11992 zone.

PVA High Edge = 11876       PVA Low Edge = 11498     Prior POC = 11557

Range Projections and Key Levels (NQ) December 2022 (Z) Contract

HOD  ATR Range Projection: 12252; LOD ATR Range Projection: 11826; 3 Day Central Pivot: 11703; 3 Day Cycle Target: 11992; 10 Day Average True Range: 260; VIX: 20

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.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

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

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