Perfect storm: The S&P 500 (SP500) has plunged 21% since January, losing more than $9T in market capitalization and suffering its worst first half of a year since 1970, while the Nasdaq Composite (COMP.IND) and Dow Jones (DJI) fell 16% and 30%, respectively. The 10-year Treasury yield climbed from 1.50% to around 3.00%, and Bitcoin (BTC-USD) has tumbled nearly 56% YTD to under $20,000. One of the only pockets of the market that gained in the first-half was commodities, with crude oil going from $75 to well over $100 a barrel and U.S. gas prices nearly tripling before falling back in recent weeks.
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Prior Session was Cycle Day 3 (CD3): Positive 3-Day Cycle, as price did recover the CD1 Low during the RTH Session, averting a failed cycle. Although the “cycle statistic” held, do not be mislead; Markets are very weak as the current Bear Market is holding it’s grip on traders. Prior range was 84 handles on 2.227M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Today begins a new cycle, with the Average Decline measuring 3716. Price is currently trading within prior value area during overnight trade. Expectation for today is for lighter trade volumes and “thin-to-win” action ahead of the long July 4th holiday weekend. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3782, initially targets 3800 – 3815 zone.
Bear Scenario: Price sustains an offer below 3782, initially targets 3760 – 3755 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 3800 PVA Low Edge = 3760 Prior POC = 3882
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)…Average Decline for CD1 measures 11213 for this cycle. Price is currently trading lower as pre-holiday trade action is expected to be relatively light. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 11520, THEN initial upside estimate targets 11550 – 11570 zone.
Bear Scenario: IF Bears sustain an offer below 11520, THEN initial downside estimate targets 11450– 11420 zone.
PVA High Edge = 11615 PVA Low Edge = 11452 Prior POC = 11550
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
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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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