September 16, S&P500 Plan and Missal
Fed Flexible
Image 1. Raising the Flag at Iwo Jima. Joe Rosenthal
I have not yet rolled to the December contract (EPZ24), I may do that tomorrow based on today’s volume. For now, all levels in September EPU24. The current contract delta is about 61 points.
Expecting some balance ahead of FOMC with possible tests into and above the prior ten-day balance high, or 5669 (~5730 in the December contract).
Crow’s Nest
Recall the 5691 gap (5752 December contract) that represents the final target for buyers which gates to the ATHs. The past week was the strongest performance all year, with 230 points netting the buyers 4.2%. The close within balance value area on Friday negated the entire sell off.
Image 2. ES (EPU24) daily and balance profiles
Buyers look to maintain daily OTFU and thus confidence heading into the FOMC, which has gone from consensus 25bp to the Fed Watch probability of 50bp at 59%. I’m almost across the finish line from my prediction of a September 25bp cut - originally laid out last year! - so I’m sticking with it. Inflation is ‘good’ for the market and 50bp, unless insulated in very comforting language, could shake up markets more than desired ahead of the election.
I would be on 25bp with a dovish presser assuring that more cuts were coming, with due speed.
Back to price levels, buyers look to close the gap above which is the main upside target. Sellers look to address thin structure below, with a repair of singles to 5608 which can coincide with a break of daily OTFU. In this case I am watching the area around 5585 for further support. I’ll be using 5622, or Friday VAL, as Monday’s pivot level.
Image 3. ES Friday RTH to Monday ETH as of 8h20EST
Monday Plan and Levels
Pivot 5622. As of 8h20EST, the volatility model is estimating 47 points with 11 points possible overshoot.
a) Defensive bid at 5608, time over pivot, volume >PDH 5641 target 5654, where sellers may be encountered, and 5669. Strong momentum could then target 5677 and gap fill 5691.
b) Defensive offer at 5639, time below pivot, target mini buying tail 5608, 5594. Further momentum target 5582 where buyers may step in. At an extreme, consider 5570-5566.
c) VIX pivot at 17.40. Selling could be brought with prints over 18.25, with buying favored below 16.45.
Image 4. ES 4H levels
This material is shared to help guide your trading and remains free. You can support my work by liking, commenting, sharing my work with your bird friends or on Twitter - and certainly with a contribution. I appreciate your support: it keeps my work consistent and timely!
Tip jar
Be sure to follow me @rareverend on X (Twitter) for the latest updates.
Don’t maintain bias in the face of contradicting information! Capital preservation is key.
This is CERTAINLY not investment advice and I am not a qualified licensed investment advisor nor a minister of the church. All information found here, including any opinions, commentaries, jokes, outright mistakes, and suggestions - expressed or implied herein - are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be as accurate a picture of trade as I see it, it is after all how I see it and errors or inaccuracies are practically expected. I will not and cannot be held liable for any actions you take as a result of anything you read here. As always, conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise.