Markets
Is a Santa rally in the works?
While stock traders will get some time off for Christmas Eve, with the market closing early at 1 p.m. ET, futures are pointing to slight gains for those sticking around in the holiday-shortened session.
Christmas Eves are typically far quieter trading sessions, with volumes on the NYSE and Nasdaq about 36.8% of a normal day, according to data from FactSet, which goes back to 2007.
More historical data: The S&P 500 has averaged a 0.5% gain on Christmas Eve, according to Dow Jones Market Data, and could mark the beginning of a Santa Claus rally, which is the tendency for stocks to rise over the last five trading sessions of December and the first two trading sessions of January.
Source: SeekingAlpha.com
Economic Calendar
4:30 PM Money Supply
4:30 PM Fed Balance Sheet
NYSE early close at 1:00 PM
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 1 (CD1): Taylor textbook CD1 as price declined early to targeted range levels, at which time reversed and rallied. Upside price targets have been fulfilled per yesterday’s Daily Trade Strategy 12.23.20. “1.) Price sustains a bid above 3680, initially targets 3695 – 3700 zone.” Range was 50.75 handles on 993M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Expectation today is for reduced volumes and range as “holiday trade” unfolds. As such, there are two estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 3685, initially targets 3695 – 3700 zone.
2.) Price sustains an offer below 3685, initially targets 3675 – 3670 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Statistic covering 12 years of recorded tracking history.
PVA High Edge = 3700 PVA Low Edge = 3685 Prior POC = 3695
Range Projections and Key Levels (ES) March 2021 (H) Contract
HOD ATR Range Projection: 3716; LOD ATR Range Projection: 3656; 3 Day Central Pivot: 3675; 3 Day Cycle Target: 3718; 10 Day Average True Range 38; VIX: 22
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price is currently trading at lower edge of prior value and within the 3 Day Central Pivot Zone. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 12715 PVA Low Edge = 12668 Prior POC = 12686
Bull Scenario: IF Bulls sustain a bid above 12670, THEN initial upside estimate targets 12700 – 12715 zone.
Bear Scenario: IF Bears sustain an offer below 12670, THEN initial downside estimate targets 12650 – 12630 zone.
Range Projections and Key Levels (NQ) March 2021 (H) Contract
HOD ATR Range Projection: 12791; LOD ATR Range Projection: 12518; 3 Day Central Pivot: 12668; 3 Day Cycle Target: 12715; 10 Day Average True Range: 160; VIX: 22
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.”
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