Trade Strategy 5.4.22

Markets

Spotlight on Powell

Federal Reserve policymakers have clearly telegraphed what they plan to do at today’s FOMC meeting before the latest blackout period began on April 23. Officials are set to hike rates by 50 basis points for the first time in 22 years, after lifting the benchmark rate by a traditional 25 bps (to a range of 0.25%-0.50%) during the FOMC’s last gathering in March. Chair Jerome Powell is also poised to announce plans for “quantitative tightening,” or allowing the central bank’s $9T balance sheet to run off at a pace of $95B per month, though outright sales of securities won’t be ruled out for the future.

Source: SeekingAlpha.com

Economic Calendar

8:30 Goods and Services Trade
9:45 PMI Composite Final
10:00 ISM Service Index
10:30 EIA Petroleum Inventories
2:00 PM FOMC Announcement
2:30 PM Chairman Press Conference

https://www.investing.com/economic-calendar/

***New: PTG Trading Room Chat Log’s Link

10:30 EIA Petroleum Inventories

Crude prices tumbled more than 2% Tuesday while staying above the key $100 per barrel support as market participants fretted again about China’s ability to keep its economy on track and retain the massive oil imports that have made it the largest consumer of the commodity, overtaking the United States.

Oil’s downside, however, appeared limited by Thursday’s impending meeting of the OPEC+, the global oil exporters’ alliance, which is determined to keep a barrel at or above $100.

Source: http://Investing.com

S&P 500

***Written Tuesday evening for Wednesday’s trading for contribution to MrTopStep’s “The Opening Print” publication.

Prior Session was Cycle Day 3 (CD3): Positive 3-Day Cycle as markets paused from recent volatility ahead of FED Interest Rate Decision (50 bps expected). Additional institutional outflows as Market on Close Sell Imbalance (MOC) measured $1 Billion. Prior range was 67 handles on 1.631M contracts exchanged. 

 …Transition from Cycle Day 3 to Cycle Day 1

This leads us into Cycle Day 1 (CD1): As markets await today’s FED Interest Rate Decision, normal decline for CD1 measures 4104. Expect slow quiet pre-release price action during the morning session, with potential for explosive afternoon session volatility. As such, estimated scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4165, initially targets 4190 – 4210 zone. 

Bear Scenario: Price sustains an offer below 4165, initially targets 4135 – 4110 zone.

PVA High Edge = 4176       PVA Low Edge = 4147         Prior POC = 4158

*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.

For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:

Link to access full Cycle Spreadsheet  > > Cycle Day 1 (CD1)

Range Projections and Key Levels (ES) June 2022 (M) Contract

HOD  ATR Range Projection: 4282; LOD ATR Range Projection: 4074; 3 Day Central Pivot: 4156; 3 Day Cycle Target: 4205; 10 Day Average True Range  115; VIX: 29

Nasdaq 100 (NQ)

Today is Cycle Day 1 (CD1)…It’s FED Day so anything goes for direction. Overnight trade is quiet and expected to remain so until 2 pm ET announcement, then potentially some fireworks. Cycle Day 1 Average Decline measures 12677. As such, there are two estimated scenarios to consider for today’s trading.

Bull Scenario: IF Bulls sustains bid above 13092, THEN initial upside estimate targets 13150 – 13180 zone.

Bear Scenario: IF Bears sustains offer below 13092, THEN initial downside estimate targets 13030 – 12998 zone.

PVA High Edge = 13116       PVA Low Edge = 13026     Prior POC = 13083

Range Projections and Key Levels (NQ) June 2022 (M) Contract

HOD  ATR Range Projection: 13552; LOD ATR Range Projection: 12677; 3 Day Central Pivot: 13030; 3 Day Cycle Target: 13633; 10 Day Average True Range: 471; VIX: 29

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.

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


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