Outlook 07/27

Context: U.S. Dollar has fallen to its lowest level in over a year after Fed signaled its balance sheet reduction would be starting soon. The central bank kept rates on hold yesterday and made no changes to its overall policy, but the statement following its July meeting said balance sheet normalization would start "relatively soon". That's a change from June when it said "this year." Busy day of earnings, with several dozen companies reporting their latest quarterly results before and after the bell: Verizon, Twitter, Procter & Gamble, Intel, Starbucks and Amazon.

/ES Value: YVAH 2477 YPOC 2476.25 YVAL 2474

/ES Plan: Yesterday closed balanced. We're moving in range, just a few ticks above yesterday's value and market printed new ATH overnight 2480. Globex shows a slight bearish profile, so we've 2 options:

A) If market holds above YVAH 2477, try to be buyer and scale into a position on the long side leaning on 2477 towards ON ATH 2480 and PBT 2483. Remember that stats say overnight new highs have big chances to be tested at regular trading hours.

B) If market fails at YVAH 2477, try to be a seller leaning on 2477 towards YVAL 2474. If that fails, next references will be the GAP 2468.25 and CLVN 2462. Current range is 2480-2462, so if market breaks down 2462, next range will be 2462-2452.

Tips: When the market opens in range within or near the value area it is showing signs of a balanced market. Trading from responsive versus initiative would be preferred. Fade the extremes of the value area. Internals should be neutral or not in trending mode.

Today's Economic Calendar

09:45 AM Bloomberg Consumer Comfort Index
10:30 AM EIA Natural Gas Inventory
11:00 AM Kansas City Fed Mfg Survey
01:00 PM 7-Year Note Auction
04:30 PM Money Supply
04:30 PM Fed Balance Sheet

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