Stocks on the Slide

U.S. Indices Quiet Post-FOMC Minutes

Posted Thursday, April 11, 2019 by
Shain Vernier • 1 min read

Today has brought a muted cash open, following the Wednesday release of the FOMC Minutes. It appears that equities players are still in the process of evaluating what a dovish FED actually means for the markets. For the first hour of trade, the DJIA (+43), S&P 500 SPX (+3), and NASDAQ (-5) are hovering near flat.

Several secondary economic reports came across the wires in the pre-cash open. Here is a quick look at the data:

Event                                                               Actual       Projected      Previous

Continuing Jobless Claims (March 25)      1.713M           1.738M             1.726M

Initial Jobless Claims (April 1)                      196K               211K                  204K

PPI (MoM, March)                                          0.6%                 0.3%                 0.1%

Core PPI (YoY, March)                                   2.4%                 2.4%                 2.5%

In short, the U.S. labor market continues to perform well and core inflation has slightly dropped from this time last year. At the moment, the markets appear to be ignoring these numbers, with the indices and USD Index trading in the vicinity of scratch.

A Sluggish Post-FOMC Minutes Open For The DJIA

The June E-mini DOW is in a holding pattern between the 26100 and 26200 levels. If nothing else, the market appears indecisive following yesterday’s FOMC Minutes release.

June E-mini DOW futures (YM), Daily Chart
June E-mini DOW futures (YM), Daily Chart

Here are two levels to watch until the weekly closing bell:

  • Resistance(1): Psyche Level, 26500
  • Support(1): 38% Current Wave Retracement, 26077

Bottom Line: For the time being, the technical outlook for the U.S. indices is bullish. Values are consolidating, but March’s daily uptrend remains valid.

For the June E-mini DOW, the 38% Current Wave retracement (26077) is a key level. Price has put in a hard test of 26100 on three separate occasions ― a fourth is likely to prompt a breakout to the 26075 level. Until elected, I will have buy orders queued up from 26078. With an initial stop at 26044, this trade produces 25 ticks on a sub-1:1 risk vs reward management plan.

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