Continuing some strength seen in the previous session, U.S. stock index futures all climbed another 0.14% overnight following a major selloff seen earlier in the week. The Dow and S&P 500 finished Wednesday up 0.2%, while tech stocks and the Nasdaq closed lower, down 0.2%. Bonds and higher rates are also in the spotlight, with the 10-year Treasury yield pulling back 3 bps to 1.51% after touching an intraday high of 1.56% on Wednesday.
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Prior Session was Cycle Day 1 (CD1): Price decline was already fulfilled during CD3, so this session acted more like a CD2 consolidation. Range was 34 handles on 1.771M contracts exchanged.
…Transition from Cycle Day 1 to Cycle Day 2
This leads us into Cycle Day 2 (CD2): Normal for CD2 is for consolidation of recent decline from prior cycle. Overnight activity has price trading back into 3-day Central Pivot Zone, where it was rejected. Short-term “lean” remains favoring the bears. As such, estimated scenarios to consider for today’s trading.
1.) Price sustains a bid above 4370, initially targets 4385 – 4390 zone.
2.) Price sustains an offer below 4370, initially targets 4350 – 4345 zone.
*****The 3 Day Cycle has a 91% probability of fulfilling Positive Cycle Statistics covering 12 years of recorded tracking history.
PVA High Edge = 4373 PVA Low Edge = 4355 Prior POC = 4368
Range Projections and Key Levels (ES) December 2021 (Z) Contract
Nasdaq 100 (NQ)
Today is Cycle Day 2 (CD2)…Price is trading back into prior value area, near 5-day POC (14830) during overnight activity. Prior range was 215 handles on 643k contracts exchanged. As such, there are two estimated scenarios to consider for today’s trading.
PVA High Edge = 14901 PVA Low Edge = 14782 Prior POC = 14832
Bull Scenario: IF Bulls sustain a bid above 14810, THEN initial upside estimate targets 14880 – 14900 zone.
Bear Scenario: IF Bears sustain an offer below 14810, THEN initial downside estimate targets 14780 – 14745 zone.
Range Projections and Key Levels (NQ) December 2021 (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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