Markets (Top Stories)
JPOW and Crew released an overall dovish presser as the markets are now pricing in rate cuts throughout 2024. Dow Jones Industrials crossed the 37000 to record high. Let the Doves Fly!
It finally looks like the Federal Reserve’s rate-hiking cycle has come to an end, as the central bank’s policymakers signaled that more rate cuts could be in store next year than they had foreseen in September. The Federal Open Market Committee maintained its key policy rate at 5.25%-5.50%, as widely expected, but it still kept the door open for additional firming. Traders cheered the Fed’s revised expectations, with all three benchmark indices ending around 1.4% higher each, while yields plummeted.
Dot plot: Fed officials now expect three rate cuts next year and four more in 2025, according to the Summary of Economic Projections. While the new projection implies fewer cuts than what the markets priced in, it means that the Fed is moving closer to easing. In the September median projections, policymakers had forecast one last rate hike for 2023, followed by two cuts in 2024. Most FOMC members expect the key rate to fall within the 4.25%-5.0% range next year.
Source: SeekingAlpha.com
Economic Calendar
https://www.investing.com/economic-calendar/
S&P 500
Prior Session was Cycle Day 1 (CD1): Shallow decline lead to an explosive rally aided by a dovish outlook by Fed Chair JPOW. Markets had already been discounting a positive release and added more to the current rally to 4775 handle. Prior range was 67 handles on 1.584M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Normal for CD2 is for two-way traffic to absorb recent strong bullish rally. With bulls in total control, this rally could certainly extend higher, although some consolidation activity would also be healthy. We’ll let Mr. Market decide its fate. We’ll comply and go along for the ride. As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4760, initially targets 4780 – 4785 zone.
Bear Scenario: Price sustains an offer below 4760, initially targets 4740 – 4735 zone.
PVA High Edge = 4761 PVA Low Edge = 4748 Prior POC = 4763
Range Projections and Key Levels (ES) March 2024 (H) Contract
HOD ATR Range Projection: 4803; LOD ATR Range Projection: 4725; 3 Day Central Pivot: 4699; 3 Day Cycle Target: 4775; 10 Day Average True Range 44; VIX: 12
Nasdaq 100 (NQ)
Prior Session was Cycle Day 1 (CD1): Shallow decline lead to an explosive rally aided by a dovish outlook by Fed Chair JPOW. Markets had already been discounting a positive release and added more to the current rally to 16800 handle. Prior range was 230 handles on 627k contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Normal for CD2 is for two-way traffic to absorb recent strong bullish rally. With bulls in total control, this rally could certainly extend higher, although some consolidation activity would also be healthy. We’ll let Mr. Market decide its fate. We’ll comply and go along for the ride. As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 16775, initially targets 16850 – 16895 zone.
Bear Scenario: Price sustains an offer below 16775, initially targets 16720 – 16700 zone.
PVA High Edge = 16712 PVA Low Edge = 16578 Prior POC = 16606
Range Projections and Key Levels (NQ) March 2024 (H) Contract
HOD ATR Range Projection: 17000; LOD ATR Range Projection: 16596; 3 Day Central Pivot: 16545; 3 Day Cycle Target: 16895; 10 Day Average True Range: 232; VIX: 12
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
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