Today at 2 PM ET we will get the FOMC meeting announcement, followed by a press conference at 2:30 pm. A rate cut of 25 basis points is expected. This is also the last day of the month, so head’s up post-announcement for possible market antics from the pros.
This is also a good time to check on the current status of the broad market, using the S&P 500 Futures…
A quick glance at Stop/Reverse lines and Range Envelopes at stopsandtargets.com shows the S&P 500 Futures currently hovering near the short-term stop/reverse line at 3015.50 with intermediate support at 2972.50 and long-term support at 2848.50.
The short-term and long-term timeframes are both rangebound with a bullish bias and the intermediate timeframe is currently trending bullish above 2972.50.
Let’s take a closer look at each timeframe using my charts to correlate with Stops and Targets’ analysis…
The monthly bar chart above does a great job of summing up the Big Picture. We can see the last higher monthly low occurred in April at 2848.50 and has been the epicenter of the games that have followed since…
In May, the pros started off by popping the last remaining bear stops above the April high and then viciously drove the market down beneath the April low (generating a long-term sell signal under that line) where the bulls were forced to capitulate at month’s end. That was outside bar number one.
In June, the pros covered their May short trades and doubled the buying (to first cover shorts and then to re-accumulate long) and forced the market all the way back above the May high to again force bears who missed the turn at the counter-trend buy signal to capitulate. That was outside bar number two in an extremely rare back-to-back configuration that I discussed extensively in my last post.
In July, the pros gapped the market up above the June high on the first day (and above key resistance dating back to September 0f 2018) and here we are on the last day of July waiting to see how it goes post-announcement and what final shape the bar will assume on the close today.
Typically, a gap and trap above key resistance leads to a breakout run to the upside–but this market has been anything but ‘typical’ recently, so that’s the reason for a little head’s up here–just in case.
Bottom line… it’s all good for the long-term bulls above last month’s high of 2969.25. A break below would trigger a long-term counter-trend sell.
It seems highly unlikely that price would decline today below the current long-term stop/reverse line at 2848.50 and so if the monthly low at today’s bar close ends up higher than that line then we will see the long-term Stop/Reverse line move up to the July low tomorrow (currently at 2955.50).
Next, let’s zoom into the intermediate timeframe…
The weekly bar chart above shows us to be currently in the eighth bar of a sequence of higher weekly lows in a trending market that began with a Stops and Targets intermediate buy signal at 2845.25 on June 6th.
It’s all good for bulls with current profits locked in above last week’s low of 2972.50, which is Stops and Targets’ intermediate stop/reverse line, but watch out on a break below.
The weekly chart is also where I track the Weekly Bar Paradigm (WBP) that I have been pointing out with regularity here since the 2009 low. Note that the most recent higher 4-bar weekly pivot low was created at 2372.75–> so that is the new ‘hard deck’ for WBP followers. That amazing bullish paradigm that has been in play since 2009 will not officially end until we eventually see a break below that last higher pivot low that cannot be subsequently recaptured–and then is followed by a series of lower weekly highs (to start a weekly bar bearish paradigm).
*The last paradigm entry buy was at stop sweep/reversal under the previous pivot at 2616.50 which then bounced almost perfectly at the very long-term trendline in December of 2018 at 2326.50. The trailing stop for that WBP entry is now advanced to to last higher pivot at 2372.75.
Pretty cool how all of that works, don’t you think?
And finally, let’s take a quick peek at the daily bars to put it all together…
The daily bar chart above shows all three timeframes with the range envelopes for each.
The short-term stop/reverse line at 3015.50 is set at yesterday’s low. Note that yesterday we had an outside bar where the pros took the stops both above and below the prior days’ range. They were getting set up in advance of today’s announcement, most likely.
If we were to see a negative reaction after today’s announcement then the first short-term sellers would come in on a break below 3001.50 (yesterday’s low). First downside target would be old breakout resistance at 2965.25. If the selling continued, then we would expect the short-term stops under 2914.50 to be the next target if things got r-e-a-l-l-y crazy (highly unlikely, but ya never know).
The more likely post-announcement scenario, of course, would be a continuation of the upside breakout, and if that happens there is no resistance above 3029.50 as the market would be creating new all-time highs.
So, let’s see what, if anything significant, happens after today’s FOMC hoopla. As mentioned before, bulls are all good above the Stop/Reverse lines–but if we start to see significant selling then be careful–especially under 2972.50!
*New Symbol Lists at Stops and Targets!
With the completion of the annual Russell Index Reconstitution there have been additions and deletions to the official list of symbols available for analysis. For full details of which symbols were dropped and added and why, follow this link (it’s an interesting read):
You can now Add New Symbols!
Stops and Targets has created a new custom symbol list that allows us to request the addition of new ticker symbols to be added to the analysis database. Those non-Russell 3000 symbols will not be included in end of day analysis reports but they will be available for analysis and able to be added to custom Watchlist notifications. (ticker symbols must be traded in US markets)
To request the addition of new symbols, send a message to me using the ‘Send Comments’ link and I will pass it along.