Markets
St. Louis Fed President James Bullard said he wouldn’t “rule out” a 75 basis-point increase, “but it isn’t my base case.” The market has priced in a 50-basis-point hike for the May meeting, kicking off a ramped-up tightening cycle.
Bullard emphasized that the fed funds rate should be lifted to 3.5% at a minimum by the end of this year. That would be more than 300 basis points above the effective rate of 0.33% – recall the Federal Open Market Committee, during its March meeting, hiked the interbank lending rate by 25 basis points off the effective zero lower bound.
Economic Calendar
8:30 Housing Starts and Permits
12:05 PM Fed’s Evans Speech
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 1 (CD1): Prior trading session experienced an extremely rare four (4)…yes four (4) range runner swings of plus/minus 40 handles. Volatility was astounding and challenging to trade for both bulls and bears. Prior range was 51 handles on 1.121M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Normal for a Cycle Day 2 is for some ‘back n fill’ consolidation activity to balance previous volatile sessions. Price volatility continued during the overnight exchange with multiple wide range swings. We have opined recently to expect elevated volatility to remain in-place. Certainly no change to that view. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4385, initially targets 4400 – 4410 zone.
Bear Scenario: Price sustains an offer below 4385, initially targets 4370 – 4365 zone.
PVA High Edge = 4403 PVA Low Edge = 4377 Prior POC = 4398
Range Projections and Key Levels (ES) June 2022 (M) Contract
HOD ATR Range Projection: 4442; LOD ATR Range Projection: 4340; 3 Day Central Pivot: 4408; 3 Day Cycle Target: 4472; 10 Day Average True Range 71; VIX: 22
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Minimum of four (4) 200 handle swings marked prior session’s volatility in the NAZ. Expectation remains for continued wide swings until there is a consensus of core value among traders. Prior range was 273 handles on 489k contracts traded. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 13900, THEN initial upside estimate targets 13975 – 14015 zone.
Bear Scenario: IF Bears sustain an offer below 13900, THEN initial downside estimate targets 13830 – 13765 zone.
PVA High Edge = 13967 PVA Low Edge = 13831 Prior POC = 13860
Range Projections and Key Levels (NQ) June 2022 (M) Contract
HOD ATR Range Projection: 14202; LOD ATR Range Projection: 13645; 3 Day Central Pivot: 14018; 3 Day Cycle Target: 14260; 10 Day Average True Range: 375; 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.”
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