Wednesday’s Futures Setups

There were four reasons why the S&P 500 and
Nasdaq 100 futures rallied today.

1. The “buzz” that a possible Fed Rate Cut may
take place at next Tuesday’s (Aug. 13) FOMC meeting.

2. There was no major economic news or earnings
news that was hampering the market at the open or during today’s trading.

3. The rising dollar. Today the Sept. dollar

(
DXU2 |
Quote |
Chart |
News |
PowerRating) broke out above the 108 resistance level and closed very strong
to 108.98, a 1.39 increase. The increase was spurred by investors expecting the
U.S. to be in a better position to handle the uncertain global economic
situation better than Europe or Japan.

4. Traders dropped Treasuries for equities. The
Sept. 30-yr. U.S. bond
(
USU2 |
Quote |
Chart |
News |
PowerRating), which was making strong moves to the
upside, lost 1′ 03 to close at 106 ’27. The Sept. 10-yr. U.S. note
(
TYU2 |
Quote |
Chart |
News |
PowerRating), hitting newer highs almost daily, gave back some of its gains to
end at 111 120 down 1 005.

The Sept S&P 500 futures
(
SPU2 |
Quote |
Chart |
News |
PowerRating)
gapped higher at the opening and raced for the intraday highs (875) and pretty
much traded in a 10-point range throughout the regular session. Near the close,
some profit takers stepped in to bring the market down. The SPU2 closed at
861.50 up 27.50 or 3.30%.

As for the Sept Nasdaq 100
(
NDU2 |
Quote |
Chart |
News |
PowerRating), it
also rallied nicely, being pushed by all of the tech sectors. It enjoyed a high
of 928, before pulling back to close at 907 up 42 or 4.86%.

In the chart above, the Sept. dollar rallied out of an
inverted head and shoulder pattern and broke above the neckline to a two-month
high.                                     

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