U.S. Stocks Lower On The Open
It has been a challenging open on Wall Street for U.S. stocks. For the first thirty minutes of trade, the DJIA DOW (-86), S&P 500 SPX (-16), and NASDAQ (-35) are all in the red. The early bearish action is bringing into jeopardy the current three-session winning streak for the indices. With tomorrow’s FOMC Minutes rapidly approaching, it appears equities players are settling in for another installment from the FED.
Like Monday, today’s U.S. economic calendar is wide open. The only release during today’s pre-market hours was the Redbook Index for August 16. This metric is of limited importance but did outperform previous numbers on both a monthly and yearly basis. If nothing else, the uptick in the Redbook Index does suggest solid performance from the retail sector.
Thus far, equities players are ignoring the Redbook, choosing to limit exposure to U.S. stocks ahead of the looming FOMC Minutes.
U.S. Stocks Pullback On The Open
The DOW has been in a relative no-man’s land for the majority of August. Volatility remains consistent, with 25,000 being the key number and robust support. At this point, investors are non-committal as the debate over FED-fueled quantitative easing moves forward.
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Here are the levels to watch today for the September E-mini DOW:
- Resistance(1): Bollinger MP, 26279
- Resistance(2): 62% Current Wave, 26408
Bottom Line: With the FOMC Minutes on deck for tomorrow, I don’t expect much bullish action from the DJIA for the rest of the U.S. session. However, if we see a strong reversal, then a sell from topside resistance may come into play.
For the rest of the trading day, sells from 26269 aren’t a bad way to trade the action. With an initial stop at 26310, this trade yields 40 ticks on a roughly 1:1 risk vs reward management plan.
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