ES/SPY Weekend Levels (Sep 26-30)
Coming off another down week. The S&P dropped 4.65% and after trading in a range of 273 points. Price chopped sideways for the first two trading days of the week then dropped sharply on Wednesday after the FOMC 75 bp rate hike and hawkish comments from Powell. Below are some points I am considering going into this week.
• Price is now below the 9/21/55 EMAs and is threatening to test the June 17th low of 3639.
• Heavy slate of data due out this week and two speeches scheduled for Powell.
• Key PCE data is due out Thursday/Friday and is the preferred metric used by the Fed to measure inflation.
• A PCE miss to the downside expect price to rally. A PCE miss to the upside expect price to move much lower.
• Currently the broad market is oversold and leaning very bearish.
• The Put/call ration is over 1 signaling heavy put buying and the VIX is just below 30.
• Anything is possible but this week is setting up for a hard reversal if any positive news is presented
• Key levels are the June 17th low below and the 3784 level above.
• Bullish harmonic noted last week is still in play.
WEEKLY EVENTS
Monday Fed Head speaking all day + ECB Largard speaks
Tuesday Fed Powell speaks, US Durable goods & US home sales + US consumer conf.
Wednesday Fed Powell Speaks, US EIA Crude Inventories
Thursday US Initial Jobless Claims, US GDP & US PCE data
Friday US Consumer Spending, US Core PCE & University of Mich. Sentiment
NOTABLE EARNINGS
Monday Nothing Notable
Tuesday CBRL, BB, PRGS
Wednesday PAYX, CTAS, THO, JEF, MTN
Thursday BBBY, KMX, RAD, MU, NKE
Friday CCL
BULLISH NOTES
Oversold conditions
RSI below 29
Nearing June 17th low support
Max bearish sentiment = Short covering rally possible
Potential dovish commentary from Fed heads + Powell
Potential positive reaction to PCE data
Still in bullish harmonic reversal zone
BEARISH NOTES
Below 9/21/55 emas
Max bearishness = self fulfilling prophecy syndrome
Potential Hawkish commentary from Fed Heads + Powell
Potential negative reaction to PCE data
Potential failure of June 17th low = panic sell off
• Price is now below the 9/21/55 EMAs and is threatening to test the June 17th low of 3639.
• Heavy slate of data due out this week and two speeches scheduled for Powell.
• Key PCE data is due out Thursday/Friday and is the preferred metric used by the Fed to measure inflation.
• A PCE miss to the downside expect price to rally. A PCE miss to the upside expect price to move much lower.
• Currently the broad market is oversold and leaning very bearish.
• The Put/call ration is over 1 signaling heavy put buying and the VIX is just below 30.
• Anything is possible but this week is setting up for a hard reversal if any positive news is presented
• Key levels are the June 17th low below and the 3784 level above.
• Bullish harmonic noted last week is still in play.
WEEKLY EVENTS
Monday Fed Head speaking all day + ECB Largard speaks
Tuesday Fed Powell speaks, US Durable goods & US home sales + US consumer conf.
Wednesday Fed Powell Speaks, US EIA Crude Inventories
Thursday US Initial Jobless Claims, US GDP & US PCE data
Friday US Consumer Spending, US Core PCE & University of Mich. Sentiment
NOTABLE EARNINGS
Monday Nothing Notable
Tuesday CBRL, BB, PRGS
Wednesday PAYX, CTAS, THO, JEF, MTN
Thursday BBBY, KMX, RAD, MU, NKE
Friday CCL
BULLISH NOTES
Oversold conditions
RSI below 29
Nearing June 17th low support
Max bearish sentiment = Short covering rally possible
Potential dovish commentary from Fed heads + Powell
Potential positive reaction to PCE data
Still in bullish harmonic reversal zone
BEARISH NOTES
Below 9/21/55 emas
Max bearishness = self fulfilling prophecy syndrome
Potential Hawkish commentary from Fed Heads + Powell
Potential negative reaction to PCE data
Potential failure of June 17th low = panic sell off
Comment:
Here is the regular trading hours for the the ES to show the gaps. Note that unlike the NQ the ES did not fill the weekend gap. It also has a big unfilled gap higher up. The ES is also closer to the June low and has been showing relative weakness.
Comment:
The ES has pushed back up to the bottom of the gap mentioned in the last post. The move comes off a softer tone from Fed's Evans. On a break of yesterday's high look for a move up to the top of the gap. Note that all spikes higher recently have been met with quick sell offs. June lows still in play.
Comment:
Price made run at the bottom of the gap but was rejected once again. Price dropped sharply and touched the June 17th low during regular trading hours. Afterhours the low was breached on negative news from AAPL. Bears firmly in control until new information is presented. Next level down is the 1.13 Fib extension. A breach of the 1.13 would negate the bullish harmonic and be very bearish putting the 2020 peak in play.
Comment:
It has recovered back into yesterday's range which is a slight positive. Key levels today are the 3735 above and the overnight low. The 1.13 FibX below is the first downside target on a break of the low.
Comment:
Same as NQ. We saw a nice rally yesterday but the key level to the upside was not broken(3735) so it remains important as does the recent low. Price may chop going into tomorrow's Core PCE data print. One can scalp between two levels but do not expect any follow through move until one of the levels is broken.
Comment:
After testing the June low again today and going into the PCE reading tomorrow here is a look at the long term chart showing potential downside targets. If price breaks the June 17th low a full compound correction into the 2020 peak is possible.
