E-mini S&P 500 Futures (June): Settled at 4123, down 34.75
E-mini Nasdaq-100 Futures (June): Settled at 13,212, down 91.50
U.S. benchmarks are sharply lower, and we can’t say we’re surprised. Ultimately, the rebound that began late last week was contained by strong overhead resistance amid unenthusiastic volume. We’re certainly not overall bearish, although we’ve noted selling opportunities as of late. We’re welcoming this weakness as a buying opportunity from an investment and trading perspective. Let’s not forget that unfinished business in the S&P remains at 4010-4020, our rare major 4-star support, and end of month selling hasn’t been uncommon.
Of course, there are other factors the media will point to today. The ongoing inflation saga brings a fabulous headline to justify normal volatility at elevated levels. However, as we insisted last week, we won’t doubt the Federal Reserve’s policy decisions; they’ve been right all along, and given components such as used car sales, inflation by CPI, and PCE metrics are set to be transitory.
Whereas media will point to inflation reads around the world earlier in the session that were overall in line with expectations as a culprit in today’s activity, we all know this overnight weakness is a byproduct of the aforementioned overhead resistance levels and such an unenthusiastic close yesterday; when markets bleed before the bell, a bottom is rarely within a few ticks. Regardless, we can point to such unenthusiasm late yesterday as a buyer’s strike ahead of today’s FOMC Minutes at 1:00 p.m. CT, but this narrative can only be coupled with the blatant failure at our rare major 4-star resistance levels.
Another driving force that traders want to keep a pulse on is the continued crypto damage. With many tech companies now carrying Bitcoin on their balance sheet, this adds to weakness and does erode buyer’s euphoria. The latest leg of the crypto selling comes as China closed loopholes that allowed access to crypto for the public.
Fed Governor Richard Clarida speaks at 9:00 a.m. CT, Atlanta Fed President Raphael Bostic follows at 10:35 a.m. CT, there’s a 20-year Bond auction at noon CT, and the FOMC Minutes from their last meeting will be released at 1:00 p.m. CT.
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