Happy Presidents' Day! Markets are closed today for the holiday, giving us a moment to reset after a choppy week. Last week we saw ES fail at 7000 multiple times before finally breaking down, with Friday's session settling near 6850 after CPI came in soft at 2.4% vs 2.5% expected. The dovish print initially sparked a relief rally to 6885 but sellers quickly faded it, telling us something about the current conviction level.
The bigger picture shift is worth noting here. We went from a market that spent weeks grinding near all-time highs above 7000 to one that's now trading 180+ points below that level. The NFP benchmark revision of -862k (vs -825k forecast) added to the uncertainty, and while the soft CPI should be supportive for rate cut hopes, the market hasn't been able to sustain any bid above 6885.
News & Sentiment Analysis:
The macro backdrop heading into Tuesday is mixed with a slight dovish lean. Friday's CPI at 2.4% YoY vs 2.5% expected was the key data point last week, coming in below consensus and pulling the previous 2.7% reading lower. This is exactly what the Fed wants to see, and money markets have now fully priced in a rate cut by July vs June previously. The 10-year yield fell to 2.25-month lows on the data, which normally would be a strong tailwind for equities.
On the Fed side, Bowman was out discussing new mortgage capital requirements under Basel, keeping the focus on regulatory matters rather than rate policy. The broader Fed tone remains cautious, with officials wanting to see more progress before committing to cuts.
Geopolitically, the news flow picked up over the weekend. The Pentagon is reportedly close to labeling certain AI companies a 'supply chain risk,' with potential punishment on the table. Secretary of State Rubio noted that making a deal with Iran "is going to be hard," while India trade officials expressed optimism that the US will reduce tariffs on India to 18% this week. OPEC+ is leaning towards resuming oil output hikes from April, which pushed crude to $63.70 (+1.3%) on the session.
From the institutional side, Goldman Sachs put out a note arguing the Dollar's overvaluation is now entirely attributable to Asian currencies, seeing three themes that will continue to weigh on USD. JPMorgan's FX desk is staying bullish EUR/USD on strong global growth momentum. A weaker dollar would generally be supportive for risk assets and commodities.
German ZEW Economic Sentiment came in at 65 vs 59.6 prior, a meaningful beat suggesting improved European economic expectations. UK employment data was mixed with unemployment at 5.1% and employment change of 108k (3M/3M) vs 82k prior.
Tuesday's calendar is relatively light for the US with no major data releases. The focus will shift to earnings with EBAY reporting Wednesday after the bell (EPS $1.35 est, Rev $2.87B) and WMT on Thursday pre-market (EPS $0.73, Rev $19.06B). WMT will be closely watched as a consumer spending barometer.
Forecast:
• Overnight: Expect continuation of the holiday Globex drift, likely range-bound between 6840-6870 with low volume
• Morning Session: First 30 minutes will set the tone. Watch for a gap fill attempt toward 6862 (Friday close area) if we open below, or a fade back to 6850 VWAP if we gap up
• Afternoon: Likely to see sellers emerge on any push above 6885 (ONH/PDH zone). Downside target 6830-6840 if support breaks
• Daily Close: Expecting a close near 6850-6860, with slight bearish bias
• Expected Range: 6820 to 6895
• Most Likely Path: Early strength faded into the afternoon as sellers defend the 6885-6895 zone, with price settling back toward 6850 VWAP
Tuesday Events:
• NY Fed Manufacturing: 6.2 (Prior: 7.70) - slight miss, manufacturing sector still expanding but losing momentum
• 19:30 ET (Mon night): RBA Meeting Minutes
• No major US economic releases scheduled for Tuesday
• Wednesday 16:05 ET: EBAY earnings (EPS: $1.35, Rev: $2.87B)
• Thursday 07:00 ET: WMT earnings (EPS: $0.73, Rev: $19.06B)
Resistance:
• 6895-6897 - Pivot Point 1st Resistance / 50% Retracement from 4-Week High-Low. This is the first real test for any upside move
• 6910-6915 - 9 Day Moving Average / 1H Equilibrium zone. A reclaim here shifts short-term momentum
• 6941-6947 - Convergence zone where 9, 18, and 40 Day Moving Averages meet. Major resistance, also aligns with Pivot Point 2nd Level
• 6984-6985 - Pivot Point 3rd Level Resistance / Previous critical level from last week's analysis. A reclaim here would signal a structural shift
• 7005-7010 - Previous breakdown zone / ATH approach area. Bulls need this back to resume the uptrend
Support:
• 6850-6852 - Pivot Point / VWAP / Y-POC. This is the magnet level for Tuesday
• 6838-6841 - Today's Low / Session Low area / Stochastic 30% level. First support test
• 6806-6810 - Pivot Point 1st Support / Target Price. A break here opens up further downside
• 6780-6785 - 4H Discount zone / 40 Day MA Stalls. Major support
• 6750-6763 - Pivot Point 2nd Support / 1-Month Low area. Bears need a close below here to accelerate the selloff
How I'm seeing it:
• Leaning bearish below 6900. The 4H structure is clearly making lower highs and the daily has broken below the key 6900 equilibrium zone
• If price pushes above 6895, watch for rejection at the 6910-6915 1H equilibrium. A close above 6915 would be the first sign of a potential reversal
• Downside scenario: Failure to hold 6850 VWAP opens up a move to 6810-6830 where the Pivot S1 and PWL converge
• Quantitative signals are bearish short-term with 60% of indicators on sell, but medium and longer-term are neutral, suggesting this is a pullback within a larger uptrend rather than a trend reversal
• The soft CPI data is a tailwind that hasn't fully played out yet. Watch for institutional buying to emerge on dips toward 6800-6830
• Primary Setup: Short from 6893-6897, stop 6918, targeting 6850 (VWAP/Pivot) then 6810 (Pivot S1)
Coming back from the long weekend, volume could be light early with a pickup expected into the afternoon as participants position ahead of mid-week earnings. The 6850-6860 zone is the battlefield, and whichever side wins that fight will likely dictate the next 50-point move.
Good Luck !!!
The bigger picture shift is worth noting here. We went from a market that spent weeks grinding near all-time highs above 7000 to one that's now trading 180+ points below that level. The NFP benchmark revision of -862k (vs -825k forecast) added to the uncertainty, and while the soft CPI should be supportive for rate cut hopes, the market hasn't been able to sustain any bid above 6885.
News & Sentiment Analysis:
The macro backdrop heading into Tuesday is mixed with a slight dovish lean. Friday's CPI at 2.4% YoY vs 2.5% expected was the key data point last week, coming in below consensus and pulling the previous 2.7% reading lower. This is exactly what the Fed wants to see, and money markets have now fully priced in a rate cut by July vs June previously. The 10-year yield fell to 2.25-month lows on the data, which normally would be a strong tailwind for equities.
On the Fed side, Bowman was out discussing new mortgage capital requirements under Basel, keeping the focus on regulatory matters rather than rate policy. The broader Fed tone remains cautious, with officials wanting to see more progress before committing to cuts.
Geopolitically, the news flow picked up over the weekend. The Pentagon is reportedly close to labeling certain AI companies a 'supply chain risk,' with potential punishment on the table. Secretary of State Rubio noted that making a deal with Iran "is going to be hard," while India trade officials expressed optimism that the US will reduce tariffs on India to 18% this week. OPEC+ is leaning towards resuming oil output hikes from April, which pushed crude to $63.70 (+1.3%) on the session.
From the institutional side, Goldman Sachs put out a note arguing the Dollar's overvaluation is now entirely attributable to Asian currencies, seeing three themes that will continue to weigh on USD. JPMorgan's FX desk is staying bullish EUR/USD on strong global growth momentum. A weaker dollar would generally be supportive for risk assets and commodities.
German ZEW Economic Sentiment came in at 65 vs 59.6 prior, a meaningful beat suggesting improved European economic expectations. UK employment data was mixed with unemployment at 5.1% and employment change of 108k (3M/3M) vs 82k prior.
Tuesday's calendar is relatively light for the US with no major data releases. The focus will shift to earnings with EBAY reporting Wednesday after the bell (EPS $1.35 est, Rev $2.87B) and WMT on Thursday pre-market (EPS $0.73, Rev $19.06B). WMT will be closely watched as a consumer spending barometer.
Forecast:
• Overnight: Expect continuation of the holiday Globex drift, likely range-bound between 6840-6870 with low volume
• Morning Session: First 30 minutes will set the tone. Watch for a gap fill attempt toward 6862 (Friday close area) if we open below, or a fade back to 6850 VWAP if we gap up
• Afternoon: Likely to see sellers emerge on any push above 6885 (ONH/PDH zone). Downside target 6830-6840 if support breaks
• Daily Close: Expecting a close near 6850-6860, with slight bearish bias
• Expected Range: 6820 to 6895
• Most Likely Path: Early strength faded into the afternoon as sellers defend the 6885-6895 zone, with price settling back toward 6850 VWAP
Tuesday Events:
• NY Fed Manufacturing: 6.2 (Prior: 7.70) - slight miss, manufacturing sector still expanding but losing momentum
• 19:30 ET (Mon night): RBA Meeting Minutes
• No major US economic releases scheduled for Tuesday
• Wednesday 16:05 ET: EBAY earnings (EPS: $1.35, Rev: $2.87B)
• Thursday 07:00 ET: WMT earnings (EPS: $0.73, Rev: $19.06B)
Resistance:
• 6895-6897 - Pivot Point 1st Resistance / 50% Retracement from 4-Week High-Low. This is the first real test for any upside move
• 6910-6915 - 9 Day Moving Average / 1H Equilibrium zone. A reclaim here shifts short-term momentum
• 6941-6947 - Convergence zone where 9, 18, and 40 Day Moving Averages meet. Major resistance, also aligns with Pivot Point 2nd Level
• 6984-6985 - Pivot Point 3rd Level Resistance / Previous critical level from last week's analysis. A reclaim here would signal a structural shift
• 7005-7010 - Previous breakdown zone / ATH approach area. Bulls need this back to resume the uptrend
Support:
• 6850-6852 - Pivot Point / VWAP / Y-POC. This is the magnet level for Tuesday
• 6838-6841 - Today's Low / Session Low area / Stochastic 30% level. First support test
• 6806-6810 - Pivot Point 1st Support / Target Price. A break here opens up further downside
• 6780-6785 - 4H Discount zone / 40 Day MA Stalls. Major support
• 6750-6763 - Pivot Point 2nd Support / 1-Month Low area. Bears need a close below here to accelerate the selloff
How I'm seeing it:
• Leaning bearish below 6900. The 4H structure is clearly making lower highs and the daily has broken below the key 6900 equilibrium zone
• If price pushes above 6895, watch for rejection at the 6910-6915 1H equilibrium. A close above 6915 would be the first sign of a potential reversal
• Downside scenario: Failure to hold 6850 VWAP opens up a move to 6810-6830 where the Pivot S1 and PWL converge
• Quantitative signals are bearish short-term with 60% of indicators on sell, but medium and longer-term are neutral, suggesting this is a pullback within a larger uptrend rather than a trend reversal
• The soft CPI data is a tailwind that hasn't fully played out yet. Watch for institutional buying to emerge on dips toward 6800-6830
• Primary Setup: Short from 6893-6897, stop 6918, targeting 6850 (VWAP/Pivot) then 6810 (Pivot S1)
Coming back from the long weekend, volume could be light early with a pickup expected into the afternoon as participants position ahead of mid-week earnings. The 6850-6860 zone is the battlefield, and whichever side wins that fight will likely dictate the next 50-point move.
Good Luck !!!
info@algoindex.com, algoindex.com | Join our free trading community: facebook.com/groups/1256769122661043
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.
info@algoindex.com, algoindex.com | Join our free trading community: facebook.com/groups/1256769122661043
Aviso legal
As informações e publicações não se destinam a ser, e não constituem, conselhos ou recomendações financeiras, de investimento, comerciais ou de outro tipo fornecidos ou endossados pela TradingView. Leia mais nos Termos de Uso.