Fed’s Powell to Address Rate Cuts at Jackson Hole: What to KnowThe annual Jackson Hole Monetary Policy Symposium takes place this week. Jay Powell, head of the Federal Reserve, will step up to the podium on August 23 and shed light into the central bank’s interest rate-cut timeline. His words will echo around global markets and either propel stocks higher on rate-cut optimism or knock them down if the outlook turns gloomy in the lead-up to the Fed's rate-setting meeting on September 18. No in-between.
The most exclusive retreat in central banking — the Jackson Hole Monetary Policy Symposium — is gathering top bankers, economists, financiers and other financial heavyweights for three days of idea swapping, hint dropping and market popping (hopefully.)
What’s Jackson Hole?
Every August, the top dogs in global finance trade their suits for some Wyoming flannel and gather at Jackson Hole. Hosted by the Kansas City Fed since 1978, this is the forum to brainstorm the future of monetary policy and send it out to traders ready to absorb every word. It’s like summer camp for the financial elite, except the campfire stories can crash markets or send them soaring.
When the Fed Chair speaks here, the world listens. Major policy shifts have been telegraphed at Jackson Hole, from hints of rate hikes to the next round of quantitative easing. If you’re trading, you can’t afford to ignore what’s said — or not said — in these mountain-side discussions.
Highlights from Past Forums
2010: Ben Bernanke, then Fed Chair, hinted at QE2, a measure to spur growth and keep prices steady through bond purchases, and the markets took off like a rocket. Were you long? Because it was a good time to be long.
2020: Jerome Powell unveiled a major shift in Fed policy towards average inflation targeting. The central bank was more inclined to tolerate inflation above the ideal 2% target before it started pumping interest rates.
Expectations for This Week’s Gathering
This week’s Fed event will be especially meaningful and consequential. The Fed boss is slated to present his keynote address on August 23. Jay Powell, the man who moves markets with a simple “Good afternoon,” has a lot to break down.
Inflation has been going down recently. The latest figures show the consumer price index for July slipped under the 3% mark for the first time since 2021.
Consumer spending remains resilient. The retail sales report, again for July, showed that the mighty American shopper upped spending by 1% , topping expectations.
The labor market, however, got way off the beaten path. Just 114,000 new jobs were created in July. This is also what caused the global market shake-up that sent ripples through every asset class — from stocks to crypto and beyond.
Against this economic backdrop, Jay Powell will be moving markets and making headlines as he delivers his remarks. Front and center is some sort of further confirmation of an expected interest rate cut — already communicated and most likely already priced in.
The question now is not if, but by how much interest rates are getting trimmed. Analysts expect borrowing costs to go down either by 25 basis points or a bigger, juicier 50-basis-point cut. And here’s what each one of these means and what’s at stake.
If the Fed chooses to cut rates down by 25bps, it risks not doing enough to prevent the economy from tipping into a recession. Higher rates for longer make it more difficult for businesses to borrow and drive growth.
But if the Fed chooses to cut rates by too much — a jumbo 50bps cut — it runs the risk of reigniting inflation and, what’s even more, fueling another speculative bull run in the markets. Low rates make money less expensive as loans cost less.
The expansive monetary policy measure of cutting interest rates aims to boost economic growth both on the business level and the consumer level. Companies take out loans to expand their operations, build new stuff and hire more workers. And the average consumer finds it easier to get a mortgage or buy a new car (or some Bitcoin ?).
Overall, more money is spinning around, creating opportunity and offering liquidity for deals across markets.
Brace yourselves as Jay Powell gets ready to drop some hints and prepare the audience for the Fed’s next meeting coming September 17-18. The markets may very well be heading into a rollercoaster few weeks as they try to predict the scale of interest rate cuts. Are you getting ready to pop a trade open this week? Share your thoughts and expectations below!
SPX trade ideas
US500 bearish analysisBearish case for US500. With UVIX going below lower lows on August 15, and US500 going above 5566.2, I think the case for 5673.5 being a long-term top is out.
This count still sees price action from October 2022 low as corrective; however, with ((1)) longer than ((3)), this count imagines a large ending diagonal playing out, with price action currently forming wave ((4)) of iv.
If correct, wave ((4)) would have a regular flat (A) and (B), looking for impulse (C) to get price below 4700.
Key supports at 5329.5 and 5153.4.
$SPX Macro Super CyclesProvides an historic segmentation of the SP:SPX from my perspective.
Purple Vertical Line to Purple Vertical Line (Super Cycle) = 69 : 100 Ratio
Green Vertical Lines = Median of Cycle
Chart on a Logarithmic Scale.
Red Box = Suggestion of Super Macro Distribution, Super Macro Bear Cycle.
Yellow Box = Suggestion of Super Macro Accumulation, Super Macro Bull Cycle.
Green Box = Suggestion of Super Macro Short Squeeze, Tail End - Super Macro Bull Cycle.
Dates are on the bottom of the chart. Correlations can be observed.
Enjoy,
Mr. Storm
S&P500 Futures Gain as Risk-On Sentiment Fuels Best Week of 2024S&P 500 Futures Rise After Risk-On Sentiment Drives Best Week of 2024
Equities fluctuated between gains and losses on Friday but ultimately ended higher, with the S&P 500 achieving a 3.9% weekly gain. The risk-on sentiment last week propelled the broad index to its strongest performance of 2024, with momentum still targeting 5,584 and 5,620, provided it stabilizes above 5,525.
Bullish Scenario:
As long as trades above 5525, there will be a bullish trend toward 5584 and 5620
Bearish Scenario:
stability under 5525 by closing 4h candle means will support falling to get 5491 and 5460
Key Levels:
- Pivot Line: 5525
- Resistance Levels: 5584, 5620, 5670
- Support Levels: 5491, 5460, 5409
Today's Expected Trading Range: The price is anticipated to fluctuate between 5525 and 5620.
Tendency: Bullish momentum
Is SP500 strike to cover crisisDear All,
This is SP500 to GDP Ratio chart which is show us maybe we should ready for another crisis. If you compare this chart to Will500PR to GDP Ratio I have published before you can clearly see negative bearish divergence between these two that means total public traded shares do not touched higher top but SP500 index reaches higher rates; So its obvious to see a sharp shrinkage as soon as possible. See if FED can cover it by soft landing or not?
Using the iShares TIP Bond ETF to predict the S&P price reversalThe iShares TIP Bond ETF serves as an inflation-protected investment by adjusting its principal based on the Consumer Price Index (CPI). This makes it a valuable tool for macroeconomic analysis, as it provides insight into how inflation expectations are being priced into the market which gives early reversal signs when observing the MS on the weekly chart.
As illustrated in the accompanying chart, when the ETF’s value (i.e., the inflation-adjusted principal) rises, the S&P 500 and Bitcoin often exhibit upward momentum, while the ETF’s yield typically declines. This inverse relationship occurs because the ETF becomes more appealing when riskier assets are expected to under perform, especially during periods of rising inflation. Investors should consider the ETF’s price adjustments in response to CPI data. For example, if CPI begins to decline and interest rates peak, the ETF may become less attractive, prompting investors to shift toward high-cap, risk-on assets in equities and potentially Bitcoin.
It is also important to note that the price of this ETF can rise due to increased demand, regardless of inflation expectations. Therefore, a comprehensive, contextual understanding of market cycles is essential when evaluating its position in a broader investment strategy.
S&P Showing Short-term ExhaustionThe S&P appears to be exhibiting short-term exhaustion following the strong rebound from its recent correction. A retest of the trendline breakout, aligning with the 23.6% and 38.2% Fibonacci retracement levels, is likely in the near term. This pullback could provide a buying opportunity before the index resumes its upward trajectory, potentially reaching new all-time highs.
SPX at a CrossroadsSPX has retraced to the area we have been calling out for the past week or so
How it handles the next pullback will decide if we head to new ATHs or continue to MUCH lower levels
SPX: the best week in 2024Posted inflation data for the US, which were below market expectations, increased optimism among market participants that the Fed will make its first move on the rate cuts in September this year. This was the major fuel for the significant increase in the value of the S&P 500 index during the week, which had its best performance week during 2024. The index started the week at the level of 5.341 and reached the highest level on Friday's trading session of 5.554. The index is currently only 2% lower from it's all time highest level, reached in July this year. Aside from inflation, the Retail Sales in July were 1% higher on a monthly basis, which was above market estimate of 0.3%. This represents an additional sign that the US economy is not at all on the glimpse of the recession, but quite opposite, based on macro data, it stands in a relatively solid shape.
The biggest weekly winners are again tech stocks. Market favorite Nvidia managed to gain an incredible 18% during the week. Apple and Microsoft were traded higher by some 3% and 4% on a weekly level. Another aspect which should be also considered is that the majority of companies on Wall Street posted quarterly results. The analysts are noting that around 78% of the listed companies posted results which were higher from the market estimate, which additionally impacted positive market expectations, and pushed the index to the higher grounds.
S&P500 - Potential short !!Hello traders!
‼️ This is my perspective on US500.
Technical analysis: Here we are in a bearish market structure from daily timeframe perspective, so I look for a short. Price near LZ and can reject from it, as well we have hidden divergence on daily and regular divergence on H1, so after BOS I will open short position.
Like, comment and subscribe to be in touch with my content!
SPX continue form bearish divergencelooks like the market sees August as a strong month,
so bearish divergence will continue with a higher high
Cup and handle back into rising wedge, until failurePretty self explanatory, I think the cup and handle pattern is forming to jump back into the large rising wedge formation. RSI and other indicators point to the rising wedge completed in a large drop on the larger daily scale
Cup and handleTarget 1 is 5800, calculated from taking the height of the cup and handle structure divided by 2, added to the top of the handle inflection point.
Market Crash 2025Insane bearish divergence on the monthly timescale, indicating a much longer period of downtown to come, likely a worldwide economic crisis. The last similar pattern in the 70's lead to a several year long bear market with a 40% drop in the S&P 500. Will take many months to play out, however. It's likely we could see the beginning of the downturn either with September job numbers or after the US election.
Up for SPX500 USDHi traders,
SPX500USD played out exactly like I've said in my outlook before my holiday.
After it finished the bigger correction up into the gap it dropped very fast into the predicted area. It swept the weekly liquidity and went up again for the next impulse leg last week.
Now for next week we could see a small correction down and more upside.
Trade idea: Wait for a correction down to finish. After a change in orderflow to bullish and a small correction down on a lower timeframe you could trade longs.
If you want to learn more about wave analysis, please make sure to follow me, give a like and respectful comment.
This shared post is only my point of view on what could be the next move in this pair based on my analysis. I do not provide signals.
Don't be emotional, just trade!
Eduwave
S&P 500 Daily Chart Analysis For Week of Aug 16, 2024Technical Analysis and Outlook:
The S&P 500 Index demonstrated significant resiliency during this week's trading session, surpassing the Inner Interim Index Rally 5443 target. Following a springy rebound, the current market price action is positioned below the newly established significant Mean Res 5564. Anticipated interim downward pressure toward the Mean Support at 5445 is probable before the index resumes its upward trajectory. The prevailing price action indicates a sustained uptrend towards the Inner Interim Index Rally at 5666, with the achieved targets expected to exert considerable downward pressure.
SPX - Doomsday scenarioA product of pure imagination.
- Declining volume
- Reaching extreme resistance
- Far away from BB mean
This is a yearly chart...so could take years to play out :)
Markets Love the Bulls!!! Close to All-Time HighsS&P pulled back 78% of the fall
Nasdaq pulled back 61% of the fall
Dow pulled back 78% of the fall
IWM pulled back 50% of the fall
Impressive rips for 2 weeks of trading for the "buy the dip" community. This week's direction was steady in futures, and gaps higher in indexes from opening to closing bell. I'm keeping the charts as clean and simple as possible. September and October are rarely good months for the markets so perhaps all-time highs are a bit of a stretch, but we're much closer now than we were August 5th when everyone was freaking out.
Upcoming news for next week:
FOMC Minutes
US PMI
Jackson Hole (with Powell Speech)
My defensive plays are focused through August and September expirations, but I'll likely continue to add hedges if appropriate.
Have a great weekend and back at it next week!!!
HOLY Moly!! IT WORKS Plan was given...
Plan was executed....
another winning trade
Have a wonderful weekend !
Stay Frosty!
Panic over?Earlier this morning, US stock index futures were building on yesterday’s impressive, and broad-based gains. On Thursday investors rushed in to hoover up equities with the mid-cap Russell 2000 leading the way to finish 2.5% higher. Tech wasn’t far behind, with the NASDAQ adding 2.3%. The Dow and the S&P 500 gained 1.4% and 1.6% respectively. The gains came on the back of a strong set of Retail Sales numbers, and on another dip in weekly Jobless Claims. Add these to the positive inflation numbers earlier in the week and it gave investors all the excuse they needed to rush back into the market. The data is just what the Federal Reserve needs to justify a rate cut next month. Inflation continues to drift back towards its 2% target, while the labour market enjoys a ‘Goldilocks’ situation. The Unemployment Rate has ticked higher, taking some of the tightness out of the sector, but not by enough to scare the horses by raising fears of an imminent recession. This also means that the market has gone back to pricing in a 25 basis point cut in September, rather than the panicky 50 basis points forecast earlier this month. Both the S&P and NASDAQ have now recorded six successive positive sessions, and are back to where they were at the end of July, before the market rout. Yesterday also saw a big move across US Treasuries. Yields soared as investors dumped bonds and put the money back to work in equities. This indicates a strong recovery in risk appetite with sentiment towards stocks turning positive once again. But it also should be a little bit of a warning sign that this sharp turnaround could be a tad overdone. Nothing goes up in a straight line forever. Yet the NASDAQ 100 and S&P 500 have now gained 13% and 9% respectively from their lows on 5th August. Those gains may be enough to entice early buyers to book some decent profits.
Potential shake out on Phase D - objective -> SupportIn macro the price is on Phase D. As it already reached the resistance, it is expected to look for the macro's support. It might not reach it today, but the projection is bearish unless it breaks the macro's ceiling on 5,560 aprox. PEPPERSTONE:US500 CME_MINI:ESU2024
Bulls and Bears zone for 08-16-2024S&P seems to have rallied too far too fast without any pullback. In that case, we could see some sort of mean reversion in near future.
Level to watch: 5540 --- 5538
