Volatility Comeback
Hey team. As we approach mid week, a slew of economical numbers and speeches will bring the volatility back and shape another emotional environment.
Let’s recap today’s session and see what’s next for the markets!
Impact Snapshot Tomorrow
FOMC Meeting Minutes
Payrolls Revision
Market Evaluation
All three major U.S. stock indexes dipped, closing a multi-session rally that had seen the equities market rebound from a sharp sell-off triggered by recession concerns.
The eight days of consecutive daily gains were the longest winning streaks for the S&P 500 and the Nasdaq since November and December.
The recent rally was fuelled by bets the Federal Reserve will signal it’s getting closer to cutting rates.
The countdown to Jerome Powell’s speech Friday in Jackson Hole and Wednesday’s US payrolls revisions are poised to capture Wall Street’s attention.
Market participants will closely analyse Powell's speech for clues about the timing and number of anticipated policy rate cuts this year and next.
Markets Breakdown
When the price is moving in a directional way and you have references and potential s/r pivots, you want to see if lower/higher prices are joined by higher volume on the way of that directional move or not.
A great example was in today’s session with the 5611 level we’ve shared this morning in our market brief over on X (read it here).
There is a big difference between “break and hold” below a reference, which is an indication that lower prices are attracting more selling in comparison to a look below and fail to get any continuation and immediately retrace back up.
Right after the wick below 5611, we bounced again on the same reference on a 20 points move towards the settle. (Read update here).
As the market moved lower below support, it did so with lower volume. Now everyone that was shorting below support on low volume is what you call “trapped sellers”.
Market get’s a counter reaction not exclusively because buyers stepped in to buy the market but these trapped sellers have to close their positions and provide additional fuel to the move up. How do you close a short? You have buy.
This is why we often say that sometimes, it’s better being a little bit late to a move than being too early.
ES
Some references we’ll be looking going forward:
Upside Levels: 5631/5654/5667
Downside Levels: 5595/5587/5561
That’s all we got!
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