Markets
Economists are forecasting U.S. headline consumer price inflation for August to ease to 8.1% Y/Y from 8.5% in July, in a growing sign that the closely-watched index may have peaked at 9.1% in June. On the other hand, core CPI, which excludes volatile prices and happens to be the Fed’s more preferred inflation gauge, is expected to increase to 6.1% in August from a year before vs. 5.9% in July, as rents and wages show little signs of slowing. Note that the Fed is currently in its blackout period before the big September meeting, so expect all the reactions to come from traders and analysts, not central bank officials.
Economic Calendar
8:30 Consumer Price Index
2:00 PM Treasury Statement
https://www.investing.com/economic-calendar/
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S&P 500
Prior Session was Cycle Day 1 (CD1): Shallow decline (which is bullish) lead to trend day up, closing nears highs of session. Range was 58 handles, on 1.472M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): CPI Print this morning at 8:30 et…Median range expected is 8.1%…Bullish if print comes in lower and bearish if print is significantly higher. Mr. Roboto seems to be discounting a better than expected print. Price is trading above prior range having fulfilled initial cycle objectives. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 4150, initially targets 4165 – 4175 zone.
Bear Scenario: Price sustains an offer below 4150, initially targets 4135 – 4130 zone.
*****3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4134 PVA Low Edge = 4115 Prior POC = 4128
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 4207; LOD ATR Range Projection: 4081; 3 Day Central Pivot: 4064; 3 Day Cycle Target: 4181; 10 Day Average True Range; 79; VIX: 23
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price is trading near its overnight high and above prior range as traders are discounting a bullish CPI Print. Cycle Objective measures 12990. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustain a bid above 12855, THEN initial upside estimate targets 12925 – 12940 zone.
Bear Scenario: IF Bears sustain an offer below 12855, THEN initial downside estimate targets 12820– 12808 zone.
PVA High Edge = 12827 PVA Low Edge = 12753 Prior POC = 12808
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 13116; LOD ATR Range Projection: 12624; 3 Day Central Pivot: 12577; 3 Day Cycle Target: 12990; 10 Day Average True Range: 300; 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.
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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