Trade Strategy 12.12.22

Markets

Brace for volatility: Stock futures are starting the week in the green ahead of the FOMC meeting on Wednesday, which will include updated interest rate and economic projections. While contracts linked to the major averages are up 1% premarket, all three of the indices lost ground last week over several rocky sessions. The Dow Jones Industrial Average declined 2.8% for its worst week since September, while the S&P 500 fell 3.4% and the Nasdaq Composite slumped 4%.

Wait and see

Investors are on edge as they head into a week that will likely set the market tone for the rest of 2022 and beyond. Fed Chair Jay Powell is still warming up in the bullpen, but he’ll be coming out to pitch on Wednesday in a key game of the Monetary Series. Fastball? Changeup? As the speed of the final throw is debated, the crowd is getting antsy if it will clock in at 50 or 75 basis points – following a string of aggressive hurls during the season.

Economic Calendar

11:30 Results of $40B, 3-Year Note Auction
12:00 PM Fed’s Bostic Speech
1:00 PM Results of $32B, 10-Year Note Auction
2:00 PM Treasury Statement

***New: PTG Average Daily Range Calculator

S&P 500

Prior Session was Cycle Day 2 (CD2): Normal CD2 as price consolidated, until end of day, with traders squaring positions, sold into the close. Range was 60 handles on 1.101M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): BIG EVENTS this week >>CPI>>>FOMC>>>OPEX>>>CONTRACT ROLLOVER. Expectation is for potential large price%moves this week as traders anxiously await clarity on multiple fronts. Markets have been locked into a range pattern within a “risk-off” sentiment. As such, estimated scenarios to consider for today’s trading.  As such, estimated scenarios to consider for today’s trading.  

Bull Scenario: Price sustains bid above 3980, initially targets 3995 – 4005 zone. 

Bear Scenario: Price sustains offer below 3980, initially targets 3965 – 3960 zone.

PVA High Edge = 4010       PVA Low Edge = 3987        Prior POC = 3994

Range Projections and Key Levels (ES) March 2022 (H) Contract

HOD  ATR Range Projection: 4031; LOD ATR Range Projection: 3905; 3 Day Central Pivot: 3980; 3 Day Cycle Target: 4045; 10 Day Average True Range  75; VIX: 24

Nasdaq 100 (NQ)

Today is Cycle Day 3 (CD3)…BIG EVENTS this week >>CPI>>>FOMC>>>OPEX>>>CONTRACT ROLLOVER. Expectation is for potential large price%moves this week as traders anxiously await clarity on multiple fronts. Markets have been locked into a range pattern within a “risk-off” sentiment. As such, estimated scenarios to consider for today’s trading.  As such, estimated scenarios to consider for today’s trading.   

Bull Scenario: IF Bulls sustains bid above 11680, THEN initial upside estimate targets 11725 – 11745 zone.

Bear Scenario: IF Bears sustains offer below 11680, THEN initial downside estimate targets 11620 – 11595 zone.

PVA High Edge = 11800       PVA Low Edge = 11703     Prior POC = 11770

Range Projections and Key Levels (NQ) March 2023 (H) Contract

HOD  ATR Range Projection: 11916; LOD ATR Range Projection: 11450; 3 Day Central Pivot: 11675; 3 Day Cycle Target: 12028; 10 Day Average True Range: 280; VIX: 24

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 SHOWN6.22.22

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