The Federal Reserve has implemented its largest interest rate hike since 1994, taking the threat of inflation seriously by intensifying its campaign against surging prices. Another 75 basis point hike – or a 50 bps move – is also in the cards for the meeting in July, according to Fed Chair Jerome Powell, who is just beginning to show his aggressive side. Stocks initially sold off on the news, before climbing into the close in somewhat of a relief rally, but the gains didn’t hold as futures stumbled overnight: Dow -2.1%; S&P 500 -2.6%; Nasdaq -3.1%.
8:30 Initial Jobless Claims
8:30 Philly Fed Business Outlook
8:30 Housing Starts and Permits
10:30 EIA Natural Gas Inventory
4:30 PM Fed Balance Sheet
***New: PTG Trading Room Chat Log’s Link
Prior Session was Cycle Day 1 (CD1): As expected, price action was relatively calm during morning session as “Wild Ryde Clyde” did not disappoint post FOMC announcement. Prior range was 120 handles on 1.902M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Overnight trade has price declining below CD1 Low (3723.50) as “risk-off” continues to be the main theme across the investing spectrum. JPOW did not exactly instill confidence that he is capable of taming the “inflation beast” any time soon, as expectation is for continued rate hikes for the foreseeable future. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3725, initially targets 3740 – 3755 zone.
Bear Scenario: Price sustains an offer below 3725, initially targets 3700 – 3695 zone.
PVA High Edge = 3803 PVA Low Edge = 3764 Prior POC = 3775
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
HOD ATR Range Projection: 3800; LOD ATR Range Projection: 3728; 3 Day Central Pivot: 3776; 3 Day Cycle Target: 3760; 10 Day Average True Range 105; VIX: 32
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Prices are sliding pre-RTH below CD1 Low (11358) as “risk-off” theme continues to dominate the investing landscape. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 11358, THEN initial upside estimate targets 11390 – 11430 zone.
Bear Scenario: IF Bears sustain an offer below 11358, THEN initial downside estimate targets 11309 – 11277 zone.
PVA High Edge = 11571 PVA Low Edge = 11391 Prior POC = 11500
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
HOD ATR Range Projection: 11670; LOD ATR Range Projection: 11374; 3 Day Central Pivot: 11485; 3 Day Cycle Target: 11458; 10 Day Average True Range: 400; 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!
“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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