Markets (Top Stories)
Almost all Federal Reserve officials at the FOMC’s May 2-3 meeting said downside risks to growth and upside risks to unemployment had increased due to banking stresses, according to the minutes published from the gathering. Participants “generally expressed uncertainty about how much more policy tightening may be appropriate,” while some noted that additional “policy firming would likely be warranted at future meetings.” That means the bank is still divided on whether to continue raising interest rates, especially if progress in bringing down inflation to the Fed’s 2% target remains “unacceptably slow.” The policymaking committee in May increased its key rate by 25 bps to a range of 5.00%-5.25%, representing its 10th straight rate hike, while odds rose of the Fed pausing in June following the release of the minutes.
Prior Session was Cycle Day 3 (CD3): Markets successfully tested the low end of last week’s multi-day range, then caught a closing bid. Price was unable to recover CD1 Low (4186), as such, a failed 3-day Cycle. Prior range was 52 handles on 1.856M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline for CD1 measures 4117 handle. Price is currently holding bid pre-RTH within a narrow range. Bulls will need to clear and convert 4155 handle to upper support to build on current up-swing. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4155, initially targets 4175 – 4180 zone.
Bear Scenario: Price sustains an offer below 4155, initially targets 4130 – 4125 zone.
PVA High Edge = 4133 PVA Low Edge = 4118 Prior POC 4125
Range Projections and Key Levels (ES) June 2023 (M) Contract
HOD ATR Range Projection: 4178; LOD ATR Range Projection: 4110; 3 Day Central Pivot: 4175; 3 Day Cycle Target: 4203; 10 Day Average True Range 47; VIX: 19
Nasdaq 100 (NQ)
Prior Session was Cycle Day 3 (CD3): Markets successfully tested the low end of last week’s multi-day range, then caught a closing bid. Price was able to recover CD1 Low (13974), as such, produced a positive 3-day Cycle. Prior range was 279 handles on 694k contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Average Decline for CD1 measures 13674 handle. Price is currently holding bid pre-RTH. Bulls will need to clear and convert 13880 handle to upper support to build on current up-swing. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 13880, initially targets 13935 – 13945 zone.
Bear Scenario: Price sustains an offer below 13880, initially targets 13820 – 13810 zone.
PVA High Edge = 13665 PVA Low Edge = 13585 Prior POC = 13610
Range Projections and Key Levels (NQ) June 2022 (M) Contract
HOD ATR Range Projection: 13990; LOD ATR Range Projection: 13734; 3 Day Central Pivot: 13815; 3 Day Cycle Target: 14072; 10 Day Average True Range: 187; VIX: 19
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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