U.S. Equities Open And Key Technical Level

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.

U.S. Equities

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.