A rally that propelled markets over the past few days took a breather on Tuesday, but with only three sessions left in 2021, stocks are still poised to close out a strong year. The S&P 500 (SP500) is up 27.4% YTD, and if an outsized rally ensues, it could possibly top 2019’s advance of 28.9% for its best year since 2013 (when it gained 32.4%). At the current rate, S&P’s return would also come out ahead of the tech-heavy Nasdaq Composite (COMP.IND), which is up 23.1% for the year.
No day off: Traders might be surprised they won’t be getting vacation time for New Year’s this year due to an obscure regulation called NYSE Rule 7.2. The law stipulates that the exchange will be closed either Friday, or the following Monday, if a holiday falls on a weekend, unless “unusual business conditions exist, such as the ending of a monthly or yearly accounting period.” It’s a pretty rare occurrence, with Rule 7.2 making its last appearance a decade ago, when New Year’s Day fell on a Saturday in 2011.
8:30 International Trade in Goods (Advance)
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
11:00 Survey of Business Uncertainty
11:30 Results of $24B, 2-Year FRN Auction
1:00 PM Results of $56B, 7-Year Note Auction
***New: PTG Trading Room Chat Log’s Link
10:30 EIA Petroleum Inventories
***Written Tuesday evening for Wednesday’s trading for contribution to MrTopStep’s “The Opening Print” publication.
Prior Session was Cycle Day 1 (CD1): Price did produce a shallow decline during the RTH Session, but was well below average, as prior Trend Day bullish momentum remained largely intact. Range was 27 handles on 921K contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Bullish momentum is anticipated to remain intact heading into the final few days of 2021. The last “big” event of the year will be Friday; JP Morgan’s Option Collar expiration trade. Expectation for CD2 is continued sideways light volume consolidation with a bullish lean. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4780, initially targets 4792 – 4798 zone.
2.) Price sustains an offer below 4780, initially targets 4770 – 4765 zone.
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:
Link to access full Cycle Spreadsheet > > Cycle Day 2 (CD2)
PVA High Edge = 4791 PVA Low Edge = 4778 Prior POC = 4788
Range Projections and Key Levels (ES) March 2022 (H) Contract
HOD ATR Range Projection: 4842; LOD ATR Range Projection: 4724; 3 Day Central Pivot: 4751; 3 Day Cycle Target: 4806; 10 Day Average True Range 66; VIX: 17.75
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price did decline back within prior value zone consolidating recent trend up activity. Expectation for this day is continued sideways consolidation with a bullish lean for the final few days of this year. Prior range was 207 handles on 450k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 16576 PVA Low Edge = 16488 Prior POC = 16548
Bull Scenario: IF Bulls sustain a bid above 16520, THEN initial upside estimate targets 16576 – 16630 zone.
Bear Scenario: IF Bears sustain an offer below 16520, THEN initial downside estimate targets 16488 – 16452 zone.
Range Projections and Key Levels (NQ) March 2022 (H) Contract
HOD ATR Range Projection: 16812; LOD ATR Range Projection: 16250; 3 Day Central Pivot: 16432; 3 Day Cycle Target: 16560; 10 Day Average True Range: 314; VIX: 17.75
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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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