Market optimism continues to evaporate as headline after headline continues to roil investing sentiment. While there have been some relief rallies in recent sessions, or what some dub capitulation trades or a dead cat bounce, those have done little to affect the overall equity trade which has turned sour since the start of 2022. In its biggest one-day loss in two years, the benchmark S&P 500 Index plunged 3.6% on Thursday, the Dow lost 1,063 points and the tech-heavy Nasdaq closed the session down 5%.
Today, we’ll see just how strong it was in April as the Employment Situation report is published at 8:30 a.m. ET. Economists are expecting the U.S. economy to have added 391K non-farm payrolls last month, marginally lower than the 431K added in March, which itself declined from a whopping 750K in February.
8:30 Non-farm payrolls
1:00 PM Baker-Hughes Rig Count
***New: PTG Trading Room Chat Log’s Link
Prior Session was Cycle Day 2 (CD2): Markets gave back all the FED upside reaction and then some, as prices closed near lows of the day. “The CBOE Volatility Index (INDEX: VIX), a measure of implied volatility, rose 5.78 (22.75%). Based on the volatility term structure’s expansion, delta hedging flows with respect to changes in volatility (vanna) pressured trade, today.” …Gamma Guys (spotgamma.com) Range was a whopping 202 handles on 2.319M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Cycle Target (4265) is in-place, so as long as price maintains bid above CD1 Low (4142.75) during RTH Session, cycle statistics are fulfilled. Continued vigilance for wide-range swings remain in-effect for the foreseeable future. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 4120, initially targets 4148 – 4150 zone.
Bear Scenario: Price sustains offer below 4120, initially targets 4100 – 4092 zone.
PVA High Edge = 4170 PVA Low Edge = 4104 Prior POC = 4148
Range Projections and Key Levels (ES) June 2022 (M) Contract
HOD ATR Range Projection: 4244; LOD ATR Range Projection: 4017; 3 Day Central Pivot: 4200; 3 Day Cycle Target: 4265; 10 Day Average True Range 133; VIX: 33
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Bulls are back-peddling again as upside FED reaction reversed hard in prior session. Cycle Targets have been fulfilled, so price still needs to trade above CD1 Low (12883) during RTH to satisfy the Cycle Statistic. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 12805, THEN initial upside estimate targets 12865 – 12891 zone.
Bear Scenario: IF Bears sustains offer below 12805, THEN initial downside estimate targets 12725 – 12710 zone.
PVA High Edge = 13007 PVA Low Edge = 12710 Prior POC = 12891
Range Projections and Key Levels (NQ) June 2022 (M) Contract
HOD ATR Range Projection: 13254; LOD ATR Range Projection: 12362; 3 Day Central Pivot: 13151; 3 Day Cycle Target: 13435; 10 Day Average True Range: 524; VIX: 33
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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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