An increasing number of economists are now doubting the possibility of a “soft landing,” which would see the Fed get inflation under control without triggering an economic downturn. An ugly Monday is in store with traders taking note of the situation: Dow futures are down 600 points premarket, while contracts linked to the S&P 500 and Nasdaq tumbled 2.6% and 3.3%, respectively. The market is already coming off its worst week since January as consumer prices stay elevated at 40-year highs and gasoline remains firmly over $5 per gallon.
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Prior Session was Cycle Day 1 (CD1): Normal Cycle Day 1 with low in-place at 3896.50. Prior range was 134 handles on 1.283M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Overnight trade has price declining in excess of 2% across markets as weekend comments regarding “recession” is reverberating throughout the investment world. Price has already exceeded the lower CD2 Violation Level (3813) with an expected huge RTH opening gap. Risk management is at the heart of successful trading, so stay focused on the best opportunities. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3815, initially targets 3835 – 3840 zone.
Bear Scenario: Price sustains an offer below 3815, initially targets 3800 – 3780 zone.
PVA High Edge = 3935 PVA Low Edge = 3899 Prior POC = 3910
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
HOD ATR Range Projection: 3897; LOD ATR Range Projection: 3780; 3 Day Central Pivot: 4045; 3 Day Cycle Target: 3896; 10 Day Average True Range 99; VIX: 33
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Prices are sliding pre-RTH as last week’s selling is accelerating as “risk-off” is the current mantra. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 11550, THEN initial upside estimate targets 11600 – 11630 zone.
Bear Scenario: IF Bears sustain an offer below 11550, THEN initial downside estimate targets 11480 – 11460 zone.
PVA High Edge = 12025 PVA Low Edge = 11854 Prior POC = 11517
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
HOD ATR Range Projection: 11849; LOD ATR Range Projection: 11419; 3 Day Central Pivot: 12395; 3 Day Cycle Target: 11850; 10 Day Average True Range: 393; 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.”
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.
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