E-mini S&P and NQ Face Resistance Following Powell’s Address

E-mini S&P (September) / E-mini NQ (September)

S&P, last week’s close: Settle at 6483.25, up 95.00 on Friday and 11.75 on the week

NQ, last week’s close: Settled at 23,569.75, up 350.00 on Friday and down 234.25 on the week

E-mini S&P and E-mini NQ futures surged higher Friday on the perceived dovishness of Fed Chair Powell’s keynote speech at Jackson Hole. He hit on the baseline outlook shifting, and the balance of risks weighing more heavily on the unemployment side of the bank’s mandate. On one hand, the topic of the entire symposium was Labor Markets in Transition, and this, to a degree, was to be expected. On the other hand, although the odds of rate cuts for September and the year in entirety have essentially not shifted, his speech was perceived to be giving the nod to September for a 25bps move. Market positioning likely de-leveraged in the days leading up and raced to reposition at the moment the coast seemed to be clear. However, we believe this is less about the coast being clear on Friday and more about momentum taking over within the market structure we now call normal.

On Friday’s strength, E-mini S&P futures traded into the August 15th opening bell wave of selling, which had a high of 6498 and aligns to create major three-star resistance at 6498-6502.50. Settlement highs from the two prior days creates key resistance at 6488.75-6490.50. The E-mini NQ traded into the opening hour range on August 19th, and this aligns to create major three-star resistance 23,638-23,650. Price action is pulling back slightly this morning and trading into our Pivot and point of balance at 6568.50-6469.25 in the E-mini S&P and 23,469-23,496 in the E-mini NQ. A break below first key support, detailed below, and steady price action below the Pivot and point of balance this morning will open the door for a further pullback into major three-star support at…