Markets
S&P 500 futures fell 1% overnight as investors braced for heightened volatility in November and December.
Source: Seeking Alpha https://seekingalpha.com/
Source: https://www.investing.com/indices/indices-cfds
Economic Calendar
8:30 GDP Q2
8:30 Corporate profits
9:30 Fed’s Kashkari: “Covid and the Economy”
9:45 Chicago PMI
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
Source: https://www.investing.com/economic-calendar/
S&P 500 (ES)
Tuesday’s Session was Cycle Day 3 (CD3): Price did reach CD3 Penetration Level (3362) during the overnight session, and then it failed to clear above prior close during the RTH session. This double-failure sequence set in motion a decline which carried price down to test prior session low, before settling mid-range. Range was 31.75 (50% of 10 day average) on 1.05M contracts exchanged.
…Transition from Cycle Day 3 to Cycle Day 1
This leads us into Cycle Day 1 (CD1): Normal for CD1 is for some magnitude decline, with an average measuring 3305. Presidential Debate is scheduled later this evening, post penning of this briefing, so anything and everything can happen. As such, there are two scenarios to consider for today’s trading.
1.) Price sustains a bid above 3330, initially targeting 3345 – 3350 zone and extended target measuring 3360.
2.) Price sustains an offer below 3330, initially targeting 3310 – 3305 zone.
P -VA High = 3345 P – VA Low = 3326 P – POC = 3328
Range Projections and Key Levels (ES) December 2020 (Z) Contract
HOD ATR Range Projection: 3357; LOD ATR Range Projection: 3292; 3 Day Central Pivot: 3310; 3 Day Cycle Target: 3358; 10 Day Average True Range 66; VIX: 26
Nasdaq 100 (NQ)
Today is Cycle Day 1 (CD1)… Price fell sharply during overnight trade nearly fulfilling CD1 Average Decline (11148). As such, there are two scenarios to consider for today’s trading.
P – VA High = 11369 P – VA Low = 11318 P – POC = 11346
Bull Scenario: IF Bulls hold bid above 11235, THEN initial upside estimate targets 11275 – 11318 zone.
Bear Scenario: IF Bears hold offer below 11235, THEN initial downside estimate targets 11195 – 11175 zone.
Range Projections and Key Levels (NQ) December 2020 (Z) Contract
HOD ATR Range Projection: 11456; LOD ATR Range Projection: 11138; 3 Day Central Pivot: 11235; 3 Day Cycle Target: 11255; 10 Day Average True Range: 289; VIX: 26
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.”
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