One day ahead of the FOMC Announcements for April, stocks, and WTI crude oil have experienced whipsaw action. At the halfway point of the U.S. session, the DJIA DOW (+9), S&P 500 SPX (-4), and NASDAQ (-78) are all near flat. Early strength has given way to weakness, as WTI crude is nearly $1.00 from intraday highs.

On the economic news front, there have been a few peripheral metrics released today. Here is a quick look at the highlights:

Event                                                                                        Actual                Projected       Previous

Redbook Index (MoM, April 24)                                            -11.8%                    NA                 -10.6%

S&P/Case-Shiller Home Prices Indices (YoY, Feb)               3.5%                      3.3%                 3.1%

Richmond FED Manufacturing Index (April)                        -53                           -6                       2

The COVID-19 pandemic has turned traditional ways of measuring economic performance on their heads. This morning’s Richmond FED Manufacturing Index (April) is a prime example of this phenomenon. The figure came in at -53, an all-time low, and record month-over-month decline. 

So, what does a crashing Richmond FED Index mean? In the COVID-19 era, not much. It’s obvious that consumption, employment, and manufacturing have all been destroyed by the lockdowns ― another negative report is simply redundant. At this point, the only real question is how fast will commerce and industry return to relative norms.

Let’s take a look at where the DOW stands going into tomorrow’s FED meeting.

U.S. Stocks Pivot South From Intraday Highs

The past five weeks have brought strength to June E-mini DOW futures. Values have bounced more than 50% from March’s panic lows and are in a daily bullish position. 

Moving forward, there are two key levels worth watching in the E-mini DOW:

• Resistance(1): 62% Retracement of COVID-19 Crash, 25,144
• Support(1): 50% COVID-19 Crash, 23,796

Bottom Line: As we roll into the late Wall Street session, it looks like the U.S. stock indices are correlated strongly with WTI crude oil. If we witness some late-day weakness in WTI, a long trade in the June E-mini DOW trend may set up.

Until the closing bell, I will have buy orders in the queue from 23,809. With an initial stop loss at 23,749, this trade produces 50 ticks on a sub-1:1 risk vs reward management plan.