U.S. Equities Open And Key Technical Level
Shain Vernier • 2 min read
Yesterday’s much-anticipated FOMC minutes release has come and gone. U.S. equities remain strong despite the hints at a coming policy shift from the FED. For traders of U.S. equities indices, the next month will be critical to our long-term view of these markets.
More Numbers From The FED
Just when you thought that the FED was done giving their 2 cents, they throw in another nickel. Today brings several more official FED numbers:
Event Previous Projected Actual
Philadelphia Fed Manufacturing Survey (Aug) 19.5 18.5 18.9
Capacity Utilization (July) 76.7% 76.7% 76.7%
Industrial Production (MoM, July) 0.4% 0.3% 0.2%
These stats are metrics developed by the U.S. Federal Reserve Board itself. In my opinion, they are relatively abstract. But, long-term equities investors will be paying attention and they are capable of driving the market.
As I have mentioned in earlier posts, the E-mini S&P 500 futures contract is a great barometer of the U.S. equities markets. When it tanks investors are running for the hills.
E-mini S&P 500 Daily Chart- Pivotal Area
For now, the E-minis look to have gained back much of what was lost last week during the U.S./North Korea panic selloff. However, it is in a pivotal technical area:
On the daily chart we are trading between the 13-Day SMA and the Bollinger midpoint. A signal of compression.
Trade is below Wednesday’s session low of 2461.25
38% of the sell off recovery is at 2457.25
Bottom Line: Today’s cash open at 9:30 AM EST will tell us a lot about U.S. equities. If you are trading E-Mini S&P futures, keep a close eye on 2457.25. If you are trading the SPX500 CFD contract, the chart pattern is very similar. 38% of the rally from last week’s low is a key level for today’s trade.
I will be looking for a test of the 38% level and intraday compression on the 30 and 60-minute charts. If price trades below this level, a short day trade is the play. Check back a bit later on in the U.S. session for a play-by-play for the trade.