Markets
Traders are hoping for some calm after the worst day for markets since the steep pandemic-driven volatility seen in 2020. The Dow (DJI) plunged nearly 1,300 points on Tuesday, leaving the index down 14% in 2022, while the benchmark S&P 500 (SP500) and tech-heavy Nasdaq (COMP.IND) tanked 4.3% and 5.2%, respectively, leaving them off 17% and 26% YTD. The broad selloff accelerated into the afternoon, in a force some attributed to outsized options activity, pulling every asset class deep into negative territory from stocks and oil to crypto and gold.
Source: SeekingAlpha.com
Economic Calendar
8:30 Producer Price Index
10:00 Atlanta Fed’s Business Inflation Expectations
https://www.investing.com/economic-calendar/
***New: PTG Trading Room Chat Log’s Link
10:30 EIA Petroleum Inventories
U.S. crude inventories rose by 6.035 million barrels for the week ended Sept. 9, API reported. That compared with a build of 3.6 million barrels the trade group cited for the previous week to Sept. 2
The numbers serve as a precursor to official inventory data on the same due from the U.S. Energy Information Administration (EIA) on Wednesday.
For last week, analysts tracked by Investing.com expect the EIA to report a crude stockpile build of 833,000 barrels, extending the 8.844-million barrel rise reported by the government agency during the week to Sept. 2.
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): CPI Print (8.3% YoY) was a big miss, which ushered in the hopeful bulls to reverse direction and aggressively sell positions throughout this session, closing near lows of the day. Range was a whopping 236.5 handles, more than 2.80 x average. Volume was 2.294M contracts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price is well below the CD1 Low (4080.25) and bulls need a miracle to recover to avert a failed 3-day cycle. Stranger things have happened, but this time it appears out of reach. Sentiment has clearly reversed and risk-off is the primary theme dominating the trading landscape. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3950, initially targets 3975 – 3980 zone.
Bear Scenario: Price sustains an offer below 3950, initially targets 3920 – 3915 zone.
PVA High Edge = 4052 PVA Low Edge = 3964 Prior POC = 4003
*****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) December 2022 (Z) Contract
HOD ATR Range Projection: 4042; LOD ATR Range Projection: 3882; 3 Day Central Pivot: 4069; 3 Day Cycle Target: 3878; 10 Day Average True Range 97; VIX: 27
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Prior session was a debacle for the bulls as the price decline was the greatest since 2020. Prior range was a stunning 904.75 handles, which is more than 3x the average. Volume swelled to 875K contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 12080, THEN initial upside estimate targets 12180– 12212 zone.
Bear Scenario: IF Bears sustains offer below 12080, THEN initial downside estimate targets 12030 – 11997 zone.
PVA High Edge = 12570 PVA Low Edge = 12203 Prior POC = 12302
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 12458; LOD ATR Range Projection: 12850; 3 Day Central Pivot: 12568; 3 Day Cycle Target: 1592; 10 Day Average True Range: 367; VIX: 27
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