The Federal Reserve’s policymaking committee appears poised to boost its benchmark rate by 75 basis points today, making it the third straight increase of that size, according to the CME FedWatch tool. The measure, which is determined by trading activity, puts an 84% probability on a 75 bps hike, which would bring the federal funds rate target range to 3.0%-3.25%, and a 16% probability on a full percentage point increase. Indeed, the widely watched 10-year Treasury yield has been climbing in recent days, pushing past 3.5%, its highest level since 2011, while the 2-year Treasury yield hit its highest level since 2007, briefly topping 4.0%.
***New: PTG Trading Room Chat Log’s Link
U.S. crude inventories rose by 1.0 million barrels for the week ended Sept. 16. That compared with a build of 6.0 million barrels reported by the API in the previous week. Economists were expecting an increase of about 2.3 million barrels.
As well as slowing demand, crude prices have also been hurt by expectations that the U.S. will release more petroleum from its strategic reserves through November.
The U.S. said Monday it would sell an additional 10 million barrels of oil from its strategic reserves in November.
The API data also showed that gasoline inventories increased by 3.2 million barrels last week, and distillate stocks rose by 1.5 million barrels.
The official government inventory report due Wednesday is expected to show weekly U.S. crude supplies rose by 2.2 million barrels last week.
***Written Tuesday evening for Wednesday’s trading for contribution to MrTopStep’s “The Opening Print” publication.
Prior Session was Cycle Day 1 (CD1): As expected for CD1, price declined fulfilling the average (3855) and establishing a new cycle low at 3844. Prior Range was 93 handles on 2.283 contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Today is FED DAY, so anything and everything is on the trading table. Markets appear to be well-hedged, though we are expecting some directional fireworks to unfold. Price settled balanced inside the value zone, with upper edge 3894, lower edge 3683 and POC 3877. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains a bid above 3875, initially targets 3905 – 3915 zone.
Bear Scenario: Price sustains an offer below 3875, initially targets 3845 – 3840 zone.
PVA High Edge = 3883 PVA Low Edge = 3864 Prior POC = 3873
*****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 2 (CD2)
Range Projections and Key Levels (ES) December 2022 (Z) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…As expected price declined in prior session establishing a new CD1 low at 11792.25. Today being FED DAY, anything and everything is on the trading table for direction. As such, there are two estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11930, THEN initial upside estimate targets 12030– 12080 zone.
Bear Scenario: IF Bears sustains offer below 11930, THEN initial downside estimate targets 11830 – 11820 zone.
PVA High Edge = 11982 PVA Low Edge = 11898 Prior POC = 11926
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
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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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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