The U.S. indices are on the bull in early pre-FED trade. For the first hour since the Wall Street cash open, the DJIA is up 175 points and the S&P 500 SPX has gained 20. Given the positive action in U.S. stocks and bearish participation in the USD Index, one has to wonder if Jerome Powell is getting ready to throw traders a last-minute curveball.

At the moment, March USD Index futures are trending south, having put in a hard test of the 96.000 level. Traders are taking a bearish stance toward the Greenback, even though the CME FedWatch Index is holding the probability of today’s rate hike steady at 74.9%. With only a few hours until Powell takes the stage, the price action against the USD is curious at best.

The S&P 500 Is On The Mend

A nice rebound is taking place in the March E-mini S&P 500 futures contract. Yesterday’s strong open faded dramatically as the day progressed. Perhaps today’s bullish break will be sustained as the session wears on.

There are two levels on my radar for the remainder of the trading day:

• Resistance(1): 38% Current Wave Retracement, 2591.75
• Support(1): Spike Low, 2530.00

Bottom Line: As long as the Spike Low at 2530.00 remains intact, I will be looking to scalp the 38% Current Wave Retracement (2591.75) to the short. Until elected, sell orders will be queued up from 2591.50, with an initial stop at 2593.75. This counter-trend play produces 12 ticks when adhering to a standard 1:1 risk vs reward management plan.