Markets
The 10-year U.S. Treasury yield has broke above 3% for the first time since December 2018 as the Federal Reserve is poised to hike interest rates and shrink its balance sheet to fight inflation. The recent climb higher has weighed on stocks, which were more attractive when rates were low under the so-called TINA trade (there is no alternative). Higher rates have also pushed up borrowing costs on mortgages and other long-term loans, raising worries about economic growth and a possible recession.
Source: SeekingAlpha.com
Economic Calendar
FOMC meeting begins
10:00 Factory Orders
10:00 Job Openings and Labor Turnover Survey
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 2 (CD2): Markets continued their decent until price fulfilling lower Violation Levels, at which time buy response reversal and short-covering drove higher into the close. Range was 110 handles on 2.260M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Cycle Target (4156) is in-place, so as long as price maintains bid above CD1 Low (4118.75) during RTH Session, cycle statistics are fulfilled. Continued vigilance for wide-range swings remain in-effect for the foreseeable future.
Our volatility estimates remain in line with the last several days at 1.2% Resistance lies at 4200 to 4210 (SPY 420 equivalent), with 4250 above there. Support shows at 4110 (SPY 410 equivalent). Following that key support is at 4051…per Gamma Guys (spotgamma.com)
As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 4123, initially targets 4155 – 4170 zone.
Bear Scenario: Price sustains offer below 4123, initially targets 4110 – 4100 zone.
PVA High Edge = 4155 PVA Low Edge = 4110 Prior POC = 4148
Range Projections and Key Levels (ES) June 2022 (M) Contract
HOD ATR Range Projection: 4246; LOD ATR Range Projection: 4058; 3 Day Central Pivot: 4183; 3 Day Cycle Target: 4156; 10 Day Average True Range 117; VIX: 32
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price continued it’s decent until Violation Zone was fulfilled. Short-covering rally drove price higher during the afternoon session, closing in upper quartile of range. Cycle Objectives have been satisfied with price trading above CD1 Low (12831.75). As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 13080, THEN initial upside estimate targets 13148 – 13188 zone.
Bear Scenario: IF Bears sustains offer below 13080, THEN initial downside estimate targets 12958 – 12948 zone.
PVA High Edge = 12958 PVA Low Edge = 12790 Prior POC = 12863
Range Projections and Key Levels (NQ) June 2022 (M) Contract
HOD ATR Range Projection: 13493; LOD ATR Range Projection: 12680; 3 Day Central Pivot: 13090; 3 Day Cycle Target: 12948; 10 Day Average True Range: 491; VIX: 32
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.”
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