Here’s The Fed Drill
Stock index futures opened the new week with
downside gaps after a slew of earnings warnings from corporate America. The
futures had a heavy feel throughout the day, but the pace and choppiness was a
hindrance to any decent follow-through either way.
The
December SP 500 futures closed out Monday’s session with a loss of —6.75 points,
and erased last week’s gains, while the Dow futures slid -85 points. Looking at
the daily chart, the ES posted a market structure high and crossed the line in
the sand with a close below its 10-day MA and Summer uptrend line. The YM also
posted a market structure high with a close below its 20-day MA, and stands
ready to test its 100-day MA at 10169. In the small-caps, the ER2 posted an
inside doji, but continues to hold its Summer uptrend line
               
The
Banking Index (BKX) gapped down hard and never looked back to settle below its
10-day and 20-day MAs. The SOX outperformed again to break its 50-day MA, and
settled just under its 38% Fib retracement of the June-Sept down move.
On
Tuesday, all eyes will be on the Fed announcement at 2:15 ET for any indication
that they may stray away from their “measured pace†of rate hikes. You know the
drill: be flat ahead of the announcement. Before that, we have a couple of
minor reports, Housing Starts and Building Permits, at 8:30 ET.Â
 
Please feel free to email me
with any questions you might have, and have a great trading week!
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