Weekly Analysis 9/15/2024
All the data is in, the sentiment has been set and the rate decision seems to be all but released. Will it be 25bps or 50bps, could we even see a hold on rates? Lets dig deeper into the data and get a read on what to expect moving forward. But first, a look back at last weeks price action. Below you can see we started the week on the lows of the 18340 zone. As expected with CPI and PPI later in the week Monday and Tuesday led to consolidation days with price staying in a slight uptrend, but mainly rotational. With CPI coming in with a solid read an initial sell off trapped the shorts then took a ride straight to the upside. 18,544 acted as key support before rallying into 19,300 before the day was through. PPI confirmed that move, but with such a rally on Wednesday we could not expect a repeat of the previous day. Price did continue the upside move and held over my key 19,398 level to close the week. All of the data points from last week continue to confirm the FEDs sentiment on wanting to cut rates this next meeting. The quiet period and rollover may have muted some of the further upside move but overall last week was a win for the bulls. I anticipated being over the 19,610 zone before the FOMC decision, so closing just below last week leaves me still at a point where there may be some indecision on the directionality come the actual news event. Historically cuts lead to some bearish action so we will wait and see. Now checking the week ahead and what we have in store.
30 minute chart shows clean moves last week and we were able to profit off the moves that presented themselves each day. As a day trader I do not really care where the week ends, I just use the sentiment to help guide follow through in the positions I take day to day.
Looking ahead we always start with our important data releases for the week:
This is the week everyone has been eyeing. It seems that the thought here is not if the Fed is cutting but how much will they cut. 25bps or 50bps we will see. All I know is we are here to adapt, react and make money on small parts of the bigger moves. DO NOT GET CAUGHT IN THE WHIP OF THE RELEASE UNLESS YOU HAVE A VERY SPECIFIC PLAN IN PLACE.
Normally I would post the CME Fedwatch later in the writeup but this week it belongs right up here at the top of the list. It is priced in 100% chance of a cut and as of me writing this, participants are leaning to a 50bps cut coming into the week.
For reference our current target rate is 525-550. This is significant as most participants might feel that the fed will be in a bit of overcorrecting mode of possibly acting "too late" and making up for it in a larger cut.
With my buy the rumor sell the news sentiment still in place this chart above shows how the market reacts each time after the fed makes a pivot and starts to cut rates. Of course it does not guarantee a selloff the timing of this cut could be very significant with the coming election and everything else we are seeing geopolitically. Just keep this in mind as your neighbors, friends and family start talking about rate cuts and markets. This is usually the sign that a temporary top is coming in. I would anticipate that the initial move would be buy side after the cut, but watch for that turn and how far it could pull back from the highs once the sellers step in.
Earnings for the week:
Earnings are all but done for the quarter, here is who reports this week.
Headlines moving Markets:
They keep trying to take him out, could be because he is doing something right.
There you have it, into a rate cut we are completely neutral on the fear greed index. Overall price action to me agrees with this sentiment. We have not pushed into the all time highs yet and have not completely broken down either. I think most market players want to see which way things move before making any decisions.
HERE ARE MY NQ LEVELS TO WATCH FOR THE WEEK:
As I mentioned above we broke and held above that 19400 level for the week last week. Right now price is undecided about the 19,522 level, which I will consider my bullish/bearish line in the sand. That being said we are ever closer to that 19,610 level which has been the true bull/bear number. I will watch to see if we can push up and hold into that zone and possibly beyond before Wednesday and the rate decision. If we are bid up prior I would watch for that initial push upside, followed by a heavy selling pressure. Overall it will be wait and see. Every level from the past few weeks, after Wednesday, may not be significant. Not only do we have the rate decision, but we are in rollover so be mindful of that open interest and the unreasonable seeming moves that occur during this time. Best to be cautious here, could make you some solid returns however you can also lose a lot and fast.
See the rollover data below. Check the link daily for updates on volume.
When the volume is equal to, or higher, than the current contract, start trading the NQZ (DECEMBER) Contract. More volume = cleaner price action and better trading conditions. EACH PLATFORM ROLLS DIFFERENTLY, SOME AUTO ROLL, SOME YOU NEED TO CHOOSE. MAKE SURE YOU KNOW HOW YOUR BROKER AND PLATFORM OPERATE!!!
Streaming Schedule for the Week Ahead:
Monday 0830-1100 CST
Tuesday 0830-1100 CST (Overtime may lead to a late start or early end)
Wednesday 0830-1100 CST (Potential for an afternoon session instead for FOMC)
Thursday 0830-1100 CST
Friday: 0830-1100 CST
Stream can be found here TRADECASTER
and on YOUTUBE or Twitch
As always if you have any questions or comments about this writeup, my trading, the coffee or just want to say hi, please fill out the form below and leave some comments! Everything I share here is for your benefit, if you would like me to add any information or analyze some other charts please let me know as I will only add something if I am trading it otherwise.
