Markets
Investors will try to get more clarity on market direction this week following the release of key inflation data on Valentine’s Day. While January consumer prices are forecast to climb 0.5% M/M for the first time in three months, the annual rate is expected to fall again to 6.2% Y/Y, continuing a decline that started in mid-2022. Keep an eye on the “core” rate as well, which strips out volatile energy and food prices, and is closely watched by Fed policymakers for its inputs on housing and other key parts of the economy.
Economic Calendar
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 3 (CD3): Three-Day Cycle objectives were NOT fulfilled as price extended losses for the week, closing near the 4100 strike. Technically a “failed” cycle, although we typically look for the “grace-day” (today) to recover the CD1 Low (4121.25) for a trading opportunity. Prior range was 43 handles on 1.697M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline measures 4045. Quick look at bigger picture, the weekly profile (see below) remains in a “One-Time-Framing” trend up, so given last week’s ending weakness, it appears to be nothing more than a garden-variety pullback. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4095, initially targets 4115 – 4125 zone.
Bear Scenario: Price sustains an offer below 4095, initially targets 4075 – 4070 zone.
PVA High Edge = 4098 PVA Low Edge = 4081 Prior POC = 4089
Range Projections and Key Levels (ES) March 2023 (H) Contract
HOD ATR Range Projection: 4150; LOD ATR Range Projection: 4044; 3 Day Central Pivot: 4116; 3 Day Cycle Target: 4121; 10 Day Average True Range 71; VIX: 21
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Average Decline measures 12212. Quick look at bigger picture, the weekly profile (see below) remains in a “One-Time-Framing” trend up, so given last week’s ending weakness, it appears to be nothing more than a garden-variety pullback. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 12330, THEN initial upside estimate targets 12425– 12435 zone.
Bear Scenario: IF Bears sustains offer below 12330, THEN initial downside estimate targets 12290 – 12280 zone.
PVA High Edge = 12359 PVA Low Edge = 12277 Prior POC = 11327
Range Projections and Key Levels (NQ) March 2023 (H) Contract
HOD ATR Range Projection: 12585; LOD ATR Range Projection: 12114; 3 Day Central Pivot: 12495; 3 Day Cycle Target: 12512; 10 Day Average True Range: 320; VIX: 21
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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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