Markets
Fed Chair Jerome Powell’s speech at the Jackson Hole Economic Policy Symposium today is expected to convey the central bank’s resolve to push inflation down closer to its 2% goal, even at the risk of raising the unemployment rate, currently at 3.5%, a 50-year low. To provide some context, two years ago at the Wyoming gathering of monetary policy wonks, Powell introduced the central bank’s new inflation averaging policy that would tolerate inflation running above its 2% goal for some time in order to push the unemployment rate lower. That was when inflation had been stubbornly lagging the Fed’s goal for years.
Economic Calendar
Jackson Hole Economic Symposium
8:30 International Trade in Goods (Advance)
8:30 Personal Income and Outlays
8:30 Retail Inventories (Advance)
8:30 Wholesale Inventories (Advance)
10:00 Consumer Sentiment
10:00 Jerome Powell Speech
1:00 PM Baker-Hughes Rig Count
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 1 (CD1): Shallow decline’s are a “sign of strength” and as with CD1 price continue its rally rhythm fulfilling upside 1.05% range target @ 4202.75, which marked high of day. Range was 59.75 (avg 58.50) handles, matching the 10-day average on 1.572M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): BIG day today as JPOW speaks at J-Hole. Markets will be focused on any hint of a “pivot” intention or the “stay the course” rhetoric. Normal for a Cycle Day 2 is for some consolidation following recent rally. 3-Day Rally Target measures 4244 handle. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4180, initially targets 4200 – 4205 zone.
Bear Scenario: Price sustains an offer below 4180, initially targets 4160 – 4155 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4182 PVA Low Edge = 4158 Prior POC = 4174
Range Projections and Key Levels (ES) Sept 2022 (U) Contract
HOD ATR Range Projection: 4238; LOD ATR Range Projection: 4142; 3 Day Central Pivot: 4152; 3 Day Cycle Target: 4244; 10 Day Average True Range; 58; VIX: 22
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Normal for CD2 is for two-way balancing action, though with today’s J-HOLE, expectation is elevated for a more directional response. 3-Day Rally Targets measures 13333. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 13077, THEN initial upside estimate targets 13150 – 13160 zone.
Bear Scenario: IF Bears sustain an offer below 13077, THEN initial downside estimate targets 13018– 13000 zone.
PVA High Edge = 13088 PVA Low Edge = 12998 Prior POC = 13057
Range Projections and Key Levels (NQ) Sept 2022 (U) Contract
HOD ATR Range Projection: 13314; LOD ATR Range Projection: 12923; 3 Day Central Pivot: 12973; 3 Day Cycle Target: 13333; 10 Day Average True Range: 244; VIX: 22
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.” –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