Bad news is good news? While it’s not entirely clear whether a recession has begun, investors are now betting on a slightly more dovish Fed, with a more moderate pace of rate hikes. Slower growth expectations were displayed in the bond market on Thursday, with the 10-year Treasury yield falling below 2.7% for the first time since early April as the economy loses momentum. Meanwhile, stocks continued to build on a post-Fed rally that was triggered by Jay Powell saying a 75 bps rate hike for September was not guaranteed as the central bank sizes up “the data on a meeting-to-meeting basis.”
8:30 Personal Income and Outlays
8:30 Employment Cost Index
9:45 Chicago PMI
10:00 Consumer Sentiment
1:00 PM Baker-Hughes Rig Count
3:00 PM Farm Prices
***New: PTG Trading Room Chat Log’s Link
Prior Session was Cycle Day 2 (CD2): Markets continued this cycle’s rally, surpassing even the most bullish upside targets. Appears as though investors have been fearing the worse, but with the Fed’s “dovish tone” on fighting inflationary pressures, found themselves either short or underexposed. Fear Of Missing Out (FOMO) is the current rally driver. Range was 116.50 handles on 1.955M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Having closed near highs of prior session and surpassing cycle targets, end of week/month momentum currently favors buying dips, though we could see a “walk-away” trade for month end. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 4110, initially targets 4120 – 4123 zone.
Bear Scenario: Price sustains offer below 4110, initially targets 4085 – 4080 zone.
PVA High Edge = 4088 PVA Low Edge = 4020 Prior POC = 4072
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
HOD ATR Range Projection: 4174; LOD ATR Range Projection: 4025; 3 Day Central Pivot: 4003; 3 Day Cycle Target: 4047; 10 Day Average True Range 83; VIX: 21
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Three-day Cycle Objectives have been surpassed with continuation of Fed Rally. We will mark 12950 as key Line-in-Sand. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 12950, THEN initial upside estimate targets 12986 – 13014 zone.
Bear Scenario: IF Bears sustains offer below 12950, THEN initial downside estimate targets 12850 – 12820 zone.
PVA High Edge = 12752 PVA Low Edge = 12534 Prior POC = 12735
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
HOD ATR Range Projection: 13209; LOD ATR Range Projection: 12584; 3 Day Central Pivot: 12487; 3 Day Cycle Target: 12628; 10 Day Average True Range: 355; VIX: 21
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 SHOWN6.22.22