U.S. Indices Open Higher One Day Ahead Of The FED

Posted Tuesday, September 25, 2018 by
Shain Vernier • 1 min read

After a negative Monday session, the U.S. indices have opened moderately positive. The DJIA rallied 60 points on the opening bell and the S&P 500 gained four. The strength is coming in the face of planned FED rate hikes and a spike in energy pricing.

In the U.S. pre-market hours, a few secondary economic metrics hit the newswires. The Redbook Index (YoY, Sept 21) came in above the previous release at 5.8%. However, the U.S. real estate sector continues to be a problem. The Housing Price Index (MoM, July) came in at 0.2%, below the previous release of 0.3%. In addition, the S&P/Case-Shiller Home Prices Indices (YoY, July) underperformed expectations. The number came in at 5.9%, beneath projections of 6.2% and the previous release of 6.4%.

Thus far the mixed numbers haven’t done much to discourage investors, with the action being slightly bullish on the young trading session.

U.S. Indices Technical Outlook

Monday brought concerted selling to December E-mini DOW futures. Prices closed in the red for the first time in four sessions. The sell-off has brought a possible long trade setup into play for today’s session.

December E-mini DOW Futures (YM), Daily Chart
December E-mini DOW Futures (YM), Daily Chart

Bottom Line: A long trade from the 38% current wave retracement (26503) is a great way to join the prevailing bullish trend. Also, this trade’s entry is in the proximity of the big-round-number of 26500. This trade location is a bonus and lends credence to it being potentially effective.

For the remainder of the session, I will have longs from 26506 queued up and ready to go. Using an initial stop at 26474, this trade produces 32 ticks on a standard 1:1 risk vs reward management plan.

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