The labor market is still “out of balance,” Fed Chair Jerome Powell said at a press conference earlier this week, putting today’s non-farm payrolls report high up on the watchlist. Economists expect the U.S. economy to have added 185K jobs in January, down from the 223K added in December, with the unemployment rate forecast to tick up to 3.6% (from 3.5%) amid an increasing amount of layoffs. However, the bigger piece of the puzzle is wage growth, which will directly influence how central bank policymakers view the current inflation landscape and how the economy is developing.
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Prior Session was Cycle Day 3 (CD3): Three-Day Cycle objectives were fulfilled as price extended to 4200 strike. The 2 pm Shake n Bake was the top tick, as price reversed hard, falling back to the opening range. Prior range was 72 handles on 2.217M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline measures 4148. BIG economic release today is Non-Farm Payrolls, in which the important “wage-growth” figure will be the key metric. We anticipate increased two-way trading today to balance out the full week of events. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4150, initially targets 4175 – 4190 zone.
Bear Scenario: Price sustains an offer below 4150, initially targets 4125 – 4120 zone.
PVA High Edge = 4195 PVA Low Edge = 4165 Prior POC = 4188
Range Projections and Key Levels (ES) March 2023 (H) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Average Decline measures 12716, which has been fulfilled during overnight trade activity. Market will need to absorb the slew of tech earnings released yesterday to consolidate post-fed. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 12760, THEN initial upside estimate targets 12837– 12863 zone.
Bear Scenario: IF Bears sustains offer below 12760, THEN initial downside estimate targets 12600 – 12570 zone.
PVA High Edge = 12854 PVA Low Edge = 12794 Prior POC = 11988
Range Projections and Key Levels (NQ) March 2023 (H) Contract
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.”
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