August 1, S&P500 Premarket Plan and Missal
Eight in a Line
Image 1. Kind Hearts and Coronets, R. Hamer (1949)
Powell walked the fine line of dovishness, appeasing the market gods and his demigods at the DNC (Harris & co.). The market still expects a rate cut in September of 25bp, although there are increasing rumblings about 50bp at one go. I won’t speculate at this time as my position on cuts has been known for a while. We now have the NFP to look forward to on Friday.
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Crow’s Missal
A break of balance to the upside took place on a true gap open ahead of the FOMC. As usual, gap rules applied, giving a clear entry just above the prior day high. Buyers took it from there into nearly all of my upper targets, stopping a few points short of my final target 5593-4 representing the gap fill. This is my main watch today for further upside, meanwhile I will consider 5576 or Wednesday’s M period spike high the day pivot.
Image 2. Monday RTH to Tuesday ETH as of 8h30EST
Thursday Plan and Levels
Pivot 5576. The volatility model estimates a range of 45 points with possible 12 point extension.
a) Time over pivot or early bid at 5585 looks for volume over ONH / 5594, targeting NPOC 5612 to 5625, a zone where sellers may defend. Further above is 5643.
b) A look above and fail of the ONH into 5600 look for a return under pivot on volume. That targets 5565 and PDC 5556. Further targets are PDO 5543 and ultimately a break of PDL 5528 into 5516 at an extreme.
c) The VIX 16.50 can be used as a directional gauge. Above 17.15 suggests seller advantage, with buyers supported below 15.90.
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