Markets
The S&P 500 and Nasdaq Composite retreated on Wednesday as the rotation out of high-flying technology shares and into more rate-sensitive names continued.
The broad S&P 500 lost 1.39% to close at 5,588.27. The tech-heavy Nasdaq slid 2.77% to end at 17,996.92, posting its worst session since December 2022 and closing below 18,000 for the first time since July 1.
Notably, Meta Platforms tumbled 5.7%, while big tech peers Netflix and Microsoft dropped more than 1%. Apple slid 2.5%.
Semiconductor stocks also struggled after Bloomberg News reported that the Biden administration is considering tougher trade restrictions if companies continue granting China access to U.S.-made technology.
This rotation comes as traders have become more optimistic on interest rate cuts, which should benefit small caps and companies with higher financing costs. Fed funds futures trading implies a high likelihood the Federal Reserve will lower rates in September, according to the CME FedWatch tool.
Source: CNBC
Economic Calendar
Source: Investing.com
S&P 500
Prior Session was Cycle Day 3: Positive Three-Day Cycle was fulfilled with 91.49% accuracy covering twelve-plus years of tracking history. We had marked this day as a “wild-card” for direction, having fulfilled 3 Day Cycle Target (5708).
Typically when cycle targets are fulfilled, market tendency is to reverse and begin the next decline in search of a new cycle low. Today’s decline fits that script perfectly, as measured selling in technology shares lead the way lower, dragging down the S&P. Range was 86 handles on 1.966M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1: Today begins a new cycle with the CD1 Average Decline Projection 5634 fulfilled. This level matches closely with the Monthly (June) VWAP (5636) and KEY Pivot Support at (5630). Needless to say that 5630 – 5635 is a “pivotal zone” for technical support.
Our discipline of maintaining positioning that is aligned with market forces continues to serve us well, so stay the course.
As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 5645, initially targets 5655 – 5660 zone.
Bear Scenario: Price sustains an offer below 5645, initially targets 5635 – 5630 zone.
PVA High Edge = 5657 PVA Low Edge = 5637 Prior POC = 5641
PTG 3 Day Cycle
EXCLUSIVE OFFER
*****The 3 Day Cycle has a 91.49% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
Link to: Range Projections (ES) Sept (U) 2024
ES Chart
Nasdaq 100 (NQ)
Prior Session was Cycle Day 3: NQ failed to achieve cycle objectives, as a seismic Change of Character (COC) unfolded on July 11th with an “Outside Reversal Day.”. This marked the beginning of the current correction in tech stocks, with today’s activity accelerating the downside exodus. Range was 632 handles on 835k contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1: Today begins a new cycle, so job # 1 for CD1 is to find a new secure low from which to rally. Current momentum is favoring the bearish case, although yesterday’s steep decline may warrant a “relief-rally” to aid in stabilizing the downside-slide. Bias has shifted now to “sell-the-rallies.”
Our discipline of maintaining positioning that is aligned with market forces continues to serve us well, so stay the course.
As such, scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 20045, initially targets 20100 – 20132 zone.
Bear Scenario: Price sustains an offer below 20045, initially targets 19990 – 19967 zone.
PVA High Edge = 20058 PVA Low Edge = 19967 Prior POC = 20045
Link to: Range Projections (NQ) Sept (U) 2024
NQ Chart
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.” –BR
*****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