Markets
Expectations for a soft landing have gone out the window following the latest FOMC meeting on Wednesday. The question, now, appears to be how hard of a hard landing will there be. Things couldn’t have been more hawkish with the Fed’s “dot plot” showing a benchmark interest rate of 4.4% by the end of this year, as well as a terminal rate of 4.6% in 2023 (up from 3.25% and 3.8%, respectively). Lower growth forecasts and higher inflation estimates were also included in the projections, with the unemployment rate going up to 4.4% and leading to job losses of more than 1M (assuming no change in the size of the U.S. workforce).
Economic Calendar
8:30 Initial Jobless Claims
8:30 Current Account
10:00 Leading Indicators
10:30 EIA Natural Gas Inventory
11:00 Kansas City Fed Mfg Survey
4:30 PM Fed Balance Sheet
***New: PTG Trading Room Chat Log’s Link
S&P 500
Prior Session was Cycle Day 2 (CD2): Biggest takeaway in yesterday’s FED Presser was that the terminal rate to be raised to 4.6%, sparking another selling wave, taking price down to 3800 handle. Range was 133.25 handles (expansion) on 2.636M contracts (swelling) ts exchanged.
…Transition from Cycle Day 2 to Cycle Day 3
This leads us into Cycle Day 3 (CD3): Price is currently below CD1 Low (3843.25) threatening a “failed cycle” if no recovery of this level. Volatility to remain high into the foreseeable future and traders/investors continue to be in “risk-off” mode. No words of wisdom here, except for manage risk and stay focused on the highest quality setup structures from which to trade. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: Price sustains bid above 3800, initially targets 3830 – 3845 zone.
Bear Scenario: Price sustains offer below 3800, initially targets 3765 – 3760 zone.
PVA High Edge = 3905 PVA Low Edge = 3854 Prior POC = 3892
Range Projections and Key Levels (ES) December 2022 (Z) Contract
HOD ATR Range Projection: 3858; LOD ATR Range Projection: 3741; 3 Day Central Pivot: 3874; 3 Day Cycle Target: 3843; 10 Day Average True Range 91; VIX: 28
Nasdaq 100 (NQ)
Today is Cycle Day 3 (CD3)…Price is trading below CD1 Low (11828.25) and would need to recover this level, otherwise forfeit a failed 3 Day Cycle. As such, estimated scenarios to consider for today’s trading.
Bull Scenario: IF Bulls sustains bid above 11650, THEN initial upside estimate targets 11750 – 11800 zone.
Bear Scenario: IF Bears sustains offer below 11650, THEN initial downside estimate targets 11550 – 11484 zone.
PVA High Edge = 12020 PVA Low Edge = 11854 Prior POC = 11973
Range Projections and Key Levels (NQ) December 2022 (Z) Contract
HOD ATR Range Projection: 11893; LOD ATR Range Projection: 11452; 3 Day Central Pivot: 11914; 3 Day Cycle Target: 11828; 10 Day Average True Range: 343; VIX: 28
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 SHOWN6.22.22