E-mini S&P and E-mini NQ futures are higher on the week but missing this key component to help solidify a bottom.
E-mini S&P (September) / E-mini NQ (September)
S&P, yesterday’s close: Settled 5369.75, down 0.50
NQ, yesterday’s close: Settled at 18,639.50, up 23.50
E-mini S&P and E-mini NQ futures had a firm but choppy start to the week. Yesterday, markets keyed off NY Fed 1-year Inflation Expectations, staying in line with expectations, while the 3-year Expectations dropped by 6bps to 2.3%, the lowest since June 2013. The E-mini S&P traded as high as 5401.75 overnight, finding additional momentum from strength in Asia before things settled in after the European open. Home Depot topped earnings estimates this morning but is lower on soft guidance, saying it expects the consumer to become more cautious. We now look to Retail Sales and PPI data from July at 7:30 am CT.
E-mini S&P futures pinged our first resistance level perfectly yesterday at 5396.75 before retreating sharply and falling into a wide range on the day. It is becoming increasingly concerning that since Wednesday’s Day 3 margin selling that took indices precipitously lower and caused a spike in volume, that volume has decreased each of the last three sessions as the market drifted higher. In fact, volume in the E-mini S&P yesterday was the lowest since July 11th. Now, it is important to note that volatilely has essentially increased since that date, which typically leads to more volume. Still, the slow grind lower without a thrust higher is a concern as it also creates a bear-flag or pennant-like pattern, especially given the streak of slightly higher highs and slightly higher lows. Although we got leadership from the likes of NVDA yesterday, the market needs broader participation from tech. What would be a harbinger of such? We have major three-star resistance in the E-mini NQ at 18,735-18,761, a level in which it failed perfectly intraday yesterday; a move out above here on stronger volume would tell us this rebound has legs.
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