Nothing going on that you don't already know. SPX futures took a little dive overnight, falling into the middle of the week's range after Europe's negative open. Going into today's US session we have very magnetic area at SPX 2885. For longer term traders, the first major area of support under duress would be well below that at 2850. That support profile has hardly changed since the start of the week and neither has the overhead resistance of 2900 and 2910. Without a positive catalyst today it would be surprising to see price driven beyond 2910. With everything on hold vis the trade war and the Fed, this week has essentially been a playground for very short-term traders. Overnight ES positioning looks to be mostly short with just over an hour until Friday's cash open. There is hardly a viable point of control to the overnight session but Thursday's daytime session is pretty balanced with a point of control at 2889.25.
US treasury futures and gold are up overnight and the Aussie/Yen and USD/Yen are down while the USD is in a holding pattern atop its 100 day average, which adds to a neutral to risk off flavor for everyone except traders who live for quick 10 point moves out of nowhere and to anywhere. For everyone else, the temper of the week brings to mind…cataplexy.
Per Kelby's post, the market is fixated on rates including this coming Wednesday's FOMC meeting - everything here is supposed to hinge on what the Fed is going to say. Traders will then balance that against the trade war moves that the US administration would like to keep shrouded in secrecy. Does this whole rate thing seem a bit surreal? Are we really that precisely engineered now? Chairman Mao might blush. It seems that within the last year...maybe a little longer...I remember gearing up for Fed day and hearing things like " ...and if the Fed does not hike rates tomorrow, traders could get nervous and sell because they'll think FOMC members know something that we don’t". Of course there are new lagging economic data and some asset volatility but the recent Fed flexibility seems weird. If the policy paradigm shifts are coming faster than usual it sure isn't reflected in the volatility/tail risk indicators I'm watching. At least gold is showing a hand as hardened masochists look for some breakout action.
(20min delay)