Trade Strategy 8.3.22

Markets

Still hawkish

Hawkish comments from several Fed presidents are countering a recent narrative taking hold of financial markets, in which policymakers would ease up on a recent tightening cycle given expectations of an economic slowdown. Stocks dipped on the remarks on Tuesday, while investors sent the 10-year Treasury yield up 15 basis points to the 2.75% level. The new spate of aggressiveness also saw the safe-haven dollar renew its surge, though there was still plenty of optimism that the U.S. could achieve a soft landing and avoid a formal recession.

Source: SeekingAlpha.com

Economic Calendar

9:45 PMI Composite Final
10:00 Factory Orders
10:00 ISM Service Index
10:30 Fed’s Harker Speech

https://www.investing.com/economic-calendar/

***New: PTG Trading Room Chat Log’s Link

10:30 EIA Petroleum Inventories

U.S. crude inventories increased by about 2.2 million barrels for the week ended July 29. That compared with a draw of 4.0 million barrels reported by the API for the previous week. Economists were expecting a decrease of about 467,000 barrels. 

The fall in crude inventories arrived just as investors looked ahead to the OPEC+ meeting later this week, when major oil producers are expected to deliver a decision on whether to boost crude output. In June, the OPEC+ Joint Ministerial Committee recommended an increase in monthly production to 648,000 barrels per day, or bpd, in July and August from about 420,000 bpd.

Gasoline inventories fell by 204,000, while distillate also declined by 351,000. 

The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies fell by about 629,000 barrels last week.

Source: http://Investing.com

S&P 500

***Written Tuesday evening for Wednesday’s trading for contribution to MrTopStep’s “The Opening Print” publication.

Prior Session was Cycle Day 2 (CD2):  This cycle day had early morning drama related to House Speaker Pelosi’s visit to Taiwan. In the end, it was a “nothing-burger”, but lots of sabre-rattling. Regarding trading, the end result was a normal wide-range CD2 balancing day. Prior range was 62 handles on 1.842M contracts exchanged. 

 …Transition from Cycle Day 2 to Cycle Day 3

This leads us into Cycle Day 3 (CD3): As if this writing, price is below CD1 Low (4097), though odds favor trading above this level during the session today, fulfilling the Three-Day Cycle Statistic. As such, estimated scenarios to consider for today’s trading.

Bull Scenario: Price sustains a bid above 4097, initially targets 4115 – 4120 zone. 

Bear Scenario: Price sustains an offer below 4097, initially targets 4072 – 4062 zone.

PVA High Edge = 4115       PVA Low Edge = 4092         Prior POC = 4094

*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.

For more detailed information for both bullish and bearish projected targets, please visit: PTG 3 Day Cycle and/or reference the Cycle Spreadsheet below:

Link to access full Cycle Spreadsheet  > > Cycle Day 3 (CD3)

Range Projections and Key Levels (ES) Sept 2022 (U) Contract

HOD  ATR Range Projection: 4156; LOD ATR Range Projection: 4040; 3 Day Central Pivot: 4116; 3 Day Cycle Target: 4216; 10 Day Average True Range  72; VIX: 23

Nasdaq 100 (NQ)

Today is Cycle Day 3 (CD3)…Price has and continues to be in “consolidation-mode” post FED-Announcement last week. Being CD3, price needs only to trade above CD1 Low (12852) during the RTH Session to secure a Positive 3-Day Cycle. As such, there are two estimated scenarios to consider for today’s trading.

Bull Scenario: IF Bulls sustains bid above 12945, THEN initial upside estimate targets 12980 – 12995 zone.

Bear Scenario: IF Bears sustains offer below 12945, THEN initial downside estimate targets 12895 – 12875 zone.

PVA High Edge = 12987       PVA Low Edge = 12876     Prior POC = 12928

Range Projections and Key Levels (NQ) Sept 2022 (U) Contract

HOD  ATR Range Projection: 13199; LOD ATR Range Projection: 12663; 3 Day Central Pivot: 12945; 3 Day Cycle Target: 13334; 10 Day Average True Range: 332; VIX: 23

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.

Disclaimer: Futures, Options, and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose.

This website is neither a solicitation nor an offer to Buy/Sell futures, options, or currencies. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

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


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