Outlook 07/26

Context: While the Fed is expected to keep its benchmark interest rate unchanged today, traders will be keeping a close eye on the central bank's statement. The focus will center around updated language on inflation and the timing of a long-awaited balance sheet reduction.

/ES Value: VAH 2477.50 POC 2474.50 VAL 2474

/ES Plan: Yesterday closed bullish. We're moving above yesterday's value and market printed new ATH overnight, and stats say overnight new highs have big chances to be tested at regular trading hours. Globex shows a slight bullish profile (GBT 2480.75), 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 ONH 2479.50, GBT 2480.75 and PBT 2483. Internals AD/VOL should be positive. If the market begins to trade within the value area and volume increases at lows, it would be recommended to exit long positions.

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 VAL 2474.

Tips: Today's FOMC day. Look for an early trade right off the open, then don't expect too much after Initial Balance until FOMC announcement and see if you can take a position based on this FOMC setup.

Today's Economic Calendar

10:00 AM New Home Sales
10:30 AM EIA Petroleum Inventories
11:30 AM 2-Year FRN Auction
01:00 PM 5-Year Note Auction
02:00 PM FOMC Announcement

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

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