Morning Notes – 8/3/2022

Good Morning:

• The DEM today is 4057-4131, which is inside the WEM from 4050-4215.
• We are still bullish against a close below the 5-day EMA (4095) and our proprietary Algo trigger (4068).
• The initial target is 4180, with resistance first at 4120, and then 4150. 4120 is the Point of Control, which is the highest volume node (hurdle) in the sandbox and the center of balance for the last 20-days.
• Support comes in at 4095, then 4067, and finally 4050.
• In total, we captured 73 points on two call positions in the Trading Room yesterday.
• Of course. we don’t make the same amount on calls as futures, and some volatility compression further muted the gains. 
• But the strategy was a conservative approach to the day, given the Pelosi/China thing and three Fed Speakers.

• Notably, and as I predicted yesterday morning, Fed speakers put the kibosh on a Fed interest rate pivot anytime soon. The market rolled over in response and closed on the lows.

• While the initial push from yesterday’s morning lows involved plenty of short-covering, the market continues to behave bullishly.

• Overnight activity is positive – but allow for some profit-taking (selling) at the open from the overnight crowd. But we are still in the lower half of the WEM range for positions into Friday’s close.

• There is no opening trade today, and we get some economic reports 30-minutes after the open, with another Fed governor speaking 30-minutes after that. It might be better to let the first hour pass before taking trades.

• When you look at the ES chart pattern symmetrically, the right side of the daily chart could look like the left side, where the market went sideways for 7-8 sessions.

Have a great day!

A.F. Thornton