While traders have been quick to dump growth stocks as inflation fears spring up in the economy, the concerns are now spreading to the broader market. Should the price pressures run too hot for a sustained period of time, the Fed may be forced to taper or even bring some rate hikes forward.
The sentiment saw U.S. stock index futures flash red again overnight, with the DJIA down 0.7%, and contracts linked to the S&P 500 and Nasdaq off 0.5% and 0.4%, respectively.
Investors today will be looking for further comments on the inflation situation as the Fed’s Thomas Barkin, Christopher Waller and James Bullard speak at several events.
More data is also ahead, with producer prices for April and weekly jobless claims. Meanwhile, the 10-year Treasury yield is back up at 1.70%, a level not seen since the beginning of April.
***New: PTG Trading Room Chat Log’s Link
Prior Session was Cycle Day 3 (CD3): Price failed to recover the Cycle Day 1 Low notching a “failed cycle”, which historically occurs only 9% of the time. Should a subsequent failed cycle occur, this would portend further market weakness in the coming weeks. Range was 99.50 handles on 2.570M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Price needs to stabilize within prior value zone or risk further selling pressures. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4076, initially targets 4096 – 4098 zone.
2.) Price sustains an offer below 4076, initially targets 4050 – 4045 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistic covering 12 years of recorded tracking history.
PVA High Edge = 4112 PVA Low Edge = 4052 Prior POC = 4076
Range Projections and Key Levels (ES) June 2021 (M) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Failed 3 Day Cycle has occurred, which historically is only 9% of the tiime. Should a subsequent failed cycle unfold, then this would portend more important structural shift in market sentiment. Prior range was 392 handles on 747k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 13153 PVA Low Edge = 13980 Prior POC = 13005
Bull Scenario: IF Bulls sustain a bid above 13065, THEN initial upside estimate targets 13153 – 13193 zone.
Bear Scenario: IF Bears sustain an offer below 13065, THEN initial downside estimate targets 13005 – 13960 zone.
Range Projections and Key Levels (NQ) June 2021 (M) 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.”
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.
Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.
This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
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