E-mini S&P Futures (September)
Current S&P 500 Futures: 3003.00, up 5.50
Yesterday’s close: Settled at 2997.50, up 12.50
Fundamentals: The Federal Reserve is in the driver’s seat and yesterday’s rip higher was the latest example. NY Fed President Williams said the central bank should act quickly and preemptively to fight economic slowdowns.
U.S benchmarks were meagerly off session lows and arguably attempting to bottom but his comments boosted the S&P from 2984 to a high of 3001.50 in an hour. Price action extended to a high of 3005.50 after settlement and to 3009.50 shortly after the reopen; a rally of nearly 1%.
During this move, the probability for the Fed to cut 50-basis points on July 31st soared to 70%; the Federal Reserve is in the driver’s seat. With the market at 3009.50, the NY Fed released a statement saying the speech was academic in nature and based on research, not about a potential policy move. The probability of a 50-basis point Fed cut have fallen to 41% by the onset of U.S hours. However, the momentum shift in price action is undeniable.
On today’s economic calendar, we look to fresh July Michigan Consumer data at 9:00 am CT. Just as crucial will be comments from St. Louis Fed President Bullard, a voting member this year. In fact, this dove was the only member to dissent at the June meeting, preferring to cut rates by 25 basis points.
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Technicals: We have kept a minor Bullish Bias through this healthy correction because the market is in an undeniable uptrend. Although the S&P did bleed through and struggle to regain major three-star support at 2981.50-2986.25 ahead of NY Fed President Williams’ comments, it never settled through there and buyers did remain steadfastly in front of major three-star support at 2963-2969.25. In an arguably more constructive path, the NQ never took out major three-star support at 7821-7851.75. In fact, neither contract took out the overnight lows heading into Thursday’s session. We are watching the NQ most closely to be a leader here and yesterday it traded and closed out above major three-star resistance at 7917.75-7921.75, we have now aligned this with settlement at 7933 and believe the tape is bullish out above here. For the S&P we find 2997.50-2999 less supportive but similarly, above here the path of least resistance is higher. A close out above 3012.50-3015.50 and 7993-8000 today is extremely bullish.
Resistance: 3004.75**, 3012.50-3015.50***, 3023.75**, 3045-3057.75***
Support: 2997.50-2999**, 2993**, 2981.50-2986.25***, 2963-2969.25***, 2944.25***
Resistance: 7993-8000***, 8012.75**, 8076.50***
Support: 7917.25-7933***, 7821-7851.75***, 7805.50*, 7743-7759.25**, 7693.75***