The ‘strong hand’ of enthusiasm has kept a bid under the stock market for yet another day as jobs numbers reinforce a dovish Fed.
S&P 500 futures are moving above initial resistance and look poised to test upper price levels (2875) that have seen on the horizon since the beginning of the week.
Careful with entries after this extension. Statistically, we know the charts have been primed to continue with both uber short-term trend and momentum remaining strong, so we’ve seen a steady move upward.
SOOOO, what’s the story here? The long countertrend push higher in the markets is intact. The FOMC is a reactionary vehicle so they need to have DATA to drive the desire to lower rates. Herein lies the sticky bit with the numbers.
Markets have failed to deep support -trade war chatter suggests a tough time for the economy ahead so the Fed funds rate futures now predicts a high likelihood of rate reduction ahead.
This has propelled enthusiasm for a lift in the equity markets and a sharp countertrend move.
The backdrop is still a muddy one for sure, so be careful with your size today as the markets are primed for some additional movement.
Tech tested our key level this morning at 7315 and has backed off -it still continues to be weak relative to the other markets as it recovers.
TAKEAWAY – Bullish bounce in an intermediate bearish trend signal tells us that for the moment as long as we hold higher supports, we will either stay in the range or head higher. The backdrop of global slowdown still prevails.
RECAP: S&P 500 futures $ES_F buyers now stronger above 2846.75 but face resistance into 2873. The midline near 2853 is the battleground in the $ES_F. For Nasdaq futures $NQ_F, this midline number is 7315.
Sellers want to move us below 2831 but they have lots of work to do. Stay alert into next week and have a great weekend!
Twitter: @AnneMarieTrades
The author trades stock market futures every day and may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
