Stock indices came off hard on Thursday. Here is the game plan to manage E-mini S&P and E-mini NQ futures before and after Fed Chair Powell’s much-anticipated Jackson Hole keynote speech.
E-mini S&P (September) / E-mini NQ (September)
S&P, yesterday’s close: Settled 5594.00, down 47.50
NQ, yesterday’s close: Settled at 19,578.25, down 331.25
Fed Chair Powell will deliver his much-anticipated keynote speech at Jackson Hole at 9:00 am CT. This is a moment the Fed Chair has utilized each of the last few years to make significant shifts or double down on policy. At the moment, the CME FedWatch Tool is signaling a 65.6% probability the Fed cuts rates four times this year (100bps). Although we have been in the three cut camp all year, we find it hard to believe the Fed makes 100bps worth of cuts. While three cuts are priced in at 100% probability, given yesterday’s Services PMI data and last week’s Retail Sales, it is fair to believe some of this gets priced out from a probability perspective.
The other two reasons we have been somewhat negative or cautious at these levels in the market are more technical. First, the E-mini NQ has failed to settle above rare major four-star resistance at 19,925, the level in which it settled prior to the GOOG and TSLA earnings and a level it has now failed at upon multiple attempts this week. At a minimum, it is a cause to monetize the rally. The other reason is how clean the rally has come out of the August 5th volatility event. The VIX traded back to 15 and if you view the two instances we have compared such an event to, August 2015 and February 2018, there were backtests after a rally out of the hole; there is no reason not anticipate something similar. We are certainly not calling for the market to fall apart, but in our levels below we help guide you with a roadmap to navigate the market swings, and our professional trade desk is here to help you along the way, give us a call 312-278-0500.
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Bias: Neutral
Resistance: 5632.50-5633.75**, 5641-5645.75**, 5651-5655.25***, 5661.75-5665.25**, 5672.75***, 5717.25-5721.25****
Pivot: 5618.50-5624
Support: 5610-5614.25**, 5599.25-5603.25***, 5593.25-5594.50***, 5573.50-5582.75***, 5558.50-5560.25**, 5547.50-5551.75***, 5526.75-5536.50***
NQ (September)
Resistance: 19,783-19,786**, 19,832-19,867***, 19,911-19,925****, 19,981-19,995*, 20,025-20,085**, 20,150-20,180***, 20,355-20,371**
Pivot: 19,726-19,743
Support: 19,664-19,680***, 19,578-19,618***, 19,529-19,544**, 19,462-19,495***, 19,394**
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Originally Posted August 23, 2024 – Gaming Market Reaction to Powell
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