Equities remain stuck in a narrow price range since reaching our IH&S target on the 19th. Ordinarily, we’d see a retracement afterwards. But, these are hardly ordinary times.
Among other issues, rising oil prices have pushed the 2s10s up to our 20 bps target.
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Futures are up slightly ahead of another data-heavy week: S&P Services and Manufacturing PMIs today, Philly Fed Non-Manufacturing, Richmond Fed, and the Conference Board confidence data tomorrow, and Initial Jobless Claims, Q2 GDP, and Core PCE later this week.
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SPX reached our 5727 IH&S target from December 2023 yesterday. The chart from our 2024 Year Ahead Forecast from Jan 4 illustrated it best:
The timing was thrown off by the August swoon. But, SPX reached it before the US election, another key element of our 2024 forecast.
The only question, now, is how much of a slide we will experience.
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Futures are up nearly 100 points following the FOMC’s 50 bps cut yesterday. 
With many factors at or near important support/resistance, it’s VIX’s breakdown that deserves special attention. Not only has the TL been broken, but the SMA10 is about to dip back below the SMA20.
Naturally, this propelled ES to new all-time highs and that much closer to our next upside target – which will likely be reached before the November CPI report which should recast yesterday’s decision as a mistake.
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The big day is finally here. Everybody’s arguing whether the FOMC will deliver a 25 or 50-bps cut. The real question: Will the market care?
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Futures are up moderately after retail sales confirmed the economic slowdown that should accommodate tomorrow’s FOMC rate cut.
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Equities are up slightly ahead of Wednesday’s important FOMC rate decision.
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August nonfarm payrolls came in at 142k versus 165k expected while the unemployment rate ticked lower to 4.2%, underscoring the Fed’s assessment that the economy is slowing enough to justify a 25 bps rate cut later this month.
Futures rallied on the news and are slightly higher after tagging our next downside target overnight.
Just a reminder…I will be off next week but will post on an occasional basis if anything unexpected occurs in the markets.
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Futures are flat this morning following unemployment data that supports the widely held expectation of a rate cut when the FOMC meets Sep 17-18.
The algos are presently concerned with the yield curve, which continues to warn of further downside, tomorrow’s jobs report, and a pesky gap which refuses to be ignored.
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Oil and gas futures have both tagged our next downside targets from June [see: Update on Oil & Gas, June 6, 2024.].
We’ll take a look at the road ahead and what it means for the equity and bond markets.
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