Outlook 07/25

Context: The Federal Reserve's Open Market Committee begins its two-day meeting on interest rate policy today, but unlike last time, expectations are that a new short-term rate hike isn't on the agenda. Instead traders are looking for language that could clue them into future increases, as well as any inkling to when the Fed will start paring its bond holdings. Earnings continue and include AMD, McDonald's, Wynn Resorts, Caterpillar, AT&T, and General Motors.

/ES Value: VAH 2469 POC 2468.50 VAL 2465.50

/ES Plan: Yesterday closed bullish. We're moving above yesterday's value and Globex shows thinner multimodal profile, so we've 2 options:

A) An Open Test Drive (OTD) so try to be buyer and scale into a position on the long side off any step of the ladder towards ATH 2477.75 and PBT 2483. Internals AD/VOL should be positive. Market printed that ATH Thursday's overnight, and stats say overnight new highs have big chances to be tested at regular trading hours.

B) An Open Rejection Reverse (ORR) If market fails going through ONH and begins to trade back with volume at lows increasing, it is a signal of rejection. Internals AD/VOL should be neutral or negative. There is a strong tendency to rotate all the way through the value area. Sell any step of the ladder towards VAH 2469.

Tips: 'One Tick Failure' (OTF) is an scenario where the market tests a key level by 1 tick before the opposing force pushes to the other side.

Today's Economic Calendar

FOMC meeting begins
10:00 AM Consumer Confidence
10:00 AM Richmond Fed Mfg.
10:00 AM State Street Investor Confidence Index
01:00 PM 2-Year Note Auction

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice. Full Disclaimer

Subscribe to receive early outlook and updates by email