A recovery for U.S. equities showed signs of faltering overnight, with DJIA futures dropping 186 points, or 0.8%, to 24,397, and S&P 500 and Nasdaq futures down 0.7%. Yesterday marked the second-straight winning session for U.S. stocks as investors went bargain hunting following the biggest weekly loss for all three indexes since 2016, sparked by signs of increasing inflation and rising bond yields.
In Asia, Japan -0.7%. Hong Kong +1.3%. China +1%. India +0.9%.
In Europe, at midday, London +0.1%. Paris -0.5%. Frankfurt -0.5%.
Futures at 6:20, Dow -0.8%. S&P -0.7%. Nasdaq -0.7%. Crude -0.3% to $59.14. Gold +0.4% to $1331.30. Bitcoin -3.9% to $8541.
Ten-year Treasury Yield -2 bps to 2.83%
Economic Calendar
6:00 NFIB Small Business Optimism Index
8:00 Fed’s Mester speech
8:55 Redbook Chain Store Sales
S&P 500 (ES)
Today is Cycle Day 3 (CD3)…Cycle Rally objectives have been fulfilled, as such the next decline could begin any time. Currently price is trading below PC (2652.50)…Bulls will need to recover and convert PH (2671.50) to expand the current upswing.
Scenario 1: IF price converts PC (2652.50) to support, THEN initial objective targets PH (2671.50). Penetration Levels measures 2679 – 2681 zone.
Scenario 2: Failure to recover PC (2652.50) opens door for decline initially targeting 2622 3 Day Central Pivot. Failure to illicit a solid buy response targets 2608 Violation Level.
HOD ATR Range Projection: 2705.66; LOD ATR Range Projection: 2589.59; Cycle Day 1 Low: 2530.25; 3 Day Central Pivot: 2622.00; 3 Day Cycle Target: 2566.75; 10 Day Average True Range 69.66; VIX: 26.95
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Cycle Rally is in place, as such Bulls will need to converts PC (6526.00) to support for continued upswing rally, otherwise new round of selling may develop.
Scenario 1: IF price clears and converts PC (6526.00), THEN initial objective targets 6598 Penetration Level, followed by 6630 VPOC.
Scenario 2: Failure to convert PC (6526.00) opens door explore 6495 – 98 zone. Breakdown from this zone targets 6475 0 6460 zone.
Range Projections and Key Levels (NQ)
HOD ATR Range Projection: 6669.95; LOD ATR Range Projection: 6357.80; Cycle Day 1 Low: 6164.00; 3 Day Central Pivot: 6423.25; 3 Day Cycle Target: 6259.00; 10 Day Average True Range: 193.45; VIX: 26.95
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.
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