Tuesday's return from Presidents' Day was about as uneventful as it gets. ES printed a measly 16-point range (6849-6865) on post-holiday volume, essentially drifting sideways around the 6855 area all day. No conviction from either side. The real story came after the bell with NVDA and META announcing a multiyear strategic partnership spanning on-premises, cloud, and AI infrastructure, with META deploying millions of NVDA chips. That should provide some AI tailwind overnight.
Wednesday is where things get interesting. We have Durable Goods at 8:30 ET (forecast -1.7% vs a massive 5.3% prior, so expect a swing), Building Permits, then Bowman at 1:00 PM, and the big one, FOMC Minutes at 2:00 PM. This is a Jan meeting where Waller and Miran dissented wanting a 25bp cut against a 10-2 hold, so the language around that debate should give us some fireworks. Markets are pricing 90% chance of a hold at the March meeting, meaning any dovish surprise in the Minutes could trigger a squeeze.
News & Sentiment Analysis:
Starting with Tuesday's session, this was as thin as expected coming off a holiday weekend. Trading volumes were 60-65% below average across major venues, with the market spending the entire session in a tight band around 6855. The takeaway here is that the bearish breakdown from 7000 has stalled, but we haven't seen any meaningful buying interest either. We are just sitting in no man's land.
From the Fed, Daly was out with several comments noting the economy feels well supported for businesses, demand uncertainty has recently changed to cautious optimism, and that businesses are seeing a buyer's market for labor. She also flagged that the lack of jobs for new grads is partly cyclical and partly because employers are uncertain about AI's impact. Nothing market-moving, but the tone leans slightly dovish since acknowledging labor softening.
The NVDA-META partnership is the biggest corporate story heading into Wednesday. META will deploy millions of NVDA chips as part of a multiyear deal spanning on-premises, cloud, and AI infrastructure. This is a meaningful commitment that reinforces the AI capex theme and should provide near-term support for both names and the broader AI complex. However, the counter-narrative is still alive. The Wall Street wrap noted that AI disruption fears continue to weigh on software names, with a clear divergence between semiconductor resilience and software sector weakness.
Fitch dropped some macro headlines on the fiscal side. They noted the Trump administration is expected to use alternative authorities to impose tariffs if needed, and the US government shutdown underscores fiscal deficit polarization. Neither is immediately market-moving, but it keeps the tariff and fiscal risk themes simmering in the background.
Institutional analysis on the FX side notes that EURUSD resting offers have been brought lower over the past week to 1.1865/70 from 1.1880/95, with a patient approach of waiting for supportive price action before re-entering long. On sterling, UK data continues to disappoint with the BOE's own expectations running softer than economists, suggesting near-term rate cuts may come earlier than planned. Dollar-Yen, the market appears overly short dollars around 152, with 155 noted as a key stop level.
On the tariff front, institutional scenario analysis puts a 64% probability on tariffs being struck down by SCOTUS but immediately replaced (SPX +0.75-1% initially then fade), 26% on tariffs being upheld (SPX down 30-50bp), and 9% on the most bullish outcome of tariffs being replaced only after mid-terms. Bessent has publicly stated the administration can replicate tariffs even if SCOTUS strikes them down, so the risk is less about the court outcome and more about the economic drag in the meantime.
Overnight data flow is light with China on holiday. UK CPI is expected at 3.0% vs 3.4% prior, a meaningful deceleration that would support BOE rate cut expectations. French CPI and ECB's Villeroy speaking round out the European session. RBNZ cut rates as expected to 2.25%.
Options and positioning wise, the 10-year yield sits at 4.06% which has stabilized after the post-CPI drop. DXY is at 97.13, essentially flat. Crude at $62.15, continuing to slide on Iran nuclear talk progress and OPEC output hike expectations. VIX at 20.30 which is notably elevated for a market that is not crashing, suggesting hedging demand remains strong.
Forecast:
• Overnight: Quiet session likely with China on holiday. NVDA-META news may provide slight lift, expecting range of 6845-6875
• Morning Session: Data-heavy open. Durable Goods at 8:30 AM will set the early tone. A miss (weaker than -1.7%) could spark a relief bid on rate cut hopes. A beat would add to the growth-is-fine narrative and keep rates concerns alive
• Afternoon: Bowman at 1:00 PM is the appetizer. FOMC Minutes at 2:00 PM is the main event. Expect positioning and volatility to pick up significantly after 2 PM
• Daily Close: Higher volatility close expected. Direction depends entirely on FOMC Minutes tone. Lean slightly bearish into the release with potential for a sharp move in either direction
• Expected Range: 6790 to 6910 (based on 14-Day statistical range of ~92 pts, with FOMC Minutes volatility premium)
• Most Likely Path: Sideways to slightly higher into 8:30 AM data, then choppy into 2 PM FOMC. Post-Minutes move likely 40-60 points in one direction. Bias is for a quick selloff toward 6810-6830 on hawkish language, or a squeeze back to 6900+ if the dissent language suggests more dovish tilt
Wednesday Events:
• 02:00 ET: UK CPI YoY (Forecast: 3.0%, Prior: 3.4%) + UK Core CPI, PPI
• 03:30 ET: ECB's Villeroy Speaks
• 08:30 ET: Building Permits (Jan) (Forecast: 1.400M, Prior: 1.411M)
• 08:30 ET: Durable Goods Orders (Jan) (Forecast: -1.7%, Prior: 5.3%) - potentially big swing
• 13:00 ET: Fed's Bowman Speaks
• 14:00 ET: FOMC Meeting Minutes (KEY EVENT - Jan meeting, Waller/Miran dissent language critical)
• 16:00 ET: TIC Net Long-Term Transactions (Dec)
• 16:05 ET: EBAY earnings (EPS: $1.35, Rev: $2.87B)
• 16:30 ET: API Weekly Crude Stock (Prior: +13.4M build)
• Thursday 07:00 ET: WMT earnings (EPS: $0.73, Rev: $19.06B)
Resistance:
• 6865-6870 - Tuesday High / ONH / Y-VAH cluster. First hurdle for any upside move, needs to clear this to get momentum
• 6883-6885 - Friday's High (PDH). This is the level sellers defended last week, a clear rejection zone
• 6900-6908 - Pivot R1 (6900.33) / 1 Standard Deviation Resistance (6908). Psychological level and first real computed resistance
• 6928-6935 - 38.2% Retracement from 4-Week High / RSI at 50% / 20-DMA (6935) convergence. A reclaim here shifts intermediate bias
• 6940-6947 - Pivot R2 (6940) / 18-DMA crossover / 40-DMA (6947) convergence. Major resistance cluster, all short-term MAs sitting here
Support:
• 6845-6850 - Pivot Point (6845.67) / Y-POC (6854.50) cluster. Current battleground, holding for now
• 6830-6839 - Stochastic 30% level (6838.95) / 40-DMA Stalls (6830.50). First real support test below the pivot
• 6806-6813 - Pivot S1 (6805.83) / 1 Standard Deviation Support (6812.79) / Target Price (6819.83) / 50% Retracement from 13-Week range. Major support zone
• 6777-6793 - 3 Standard Deviations Support (6777) / 2 SD Support (6793). Deep support that would indicate extreme selling
• 6751-6758 - Pivot S2 (6751.17) / 1-Month Low (6751.50) / 38.2% Retracement from 13-Week Low. Bears need a close below here to confirm breakdown
How I'm seeing it:
• Bearish bias remains intact below 6900. Price is below all short-term moving averages (5/20/50 DMA all above at 6875-6935), directional readings are strongly negative with -DI at 27.83 vs +DI at 5.33, and composite indicators have shifted from Buy (last month) to 40% Sell
• Tuesday's 16-point range tells us the market is coiling for a move. Wednesday's data and FOMC Minutes should be the catalyst that breaks this range
• Upside scenario: If FOMC Minutes reveal more dovish dissent or language suggesting rate cuts are closer, we could see a squeeze to 6900-6910 quickly. Key level to watch for sustained bullish reversal is 6935 (20-DMA)
• Downside scenario: Hawkish Minutes plus weak Durable Goods could push us to 6810-6830 where Pivot S1 and the Target Price cluster. Below there, 6780-6790 would be the 4H discount zone target
• NVDA-META partnership provides a floor for AI names, but the broader AI disruption fear in software is keeping risk-off sentiment elevated (VIX 20.30)
• Primary Setup: Short from 6883-6890, stop 6915, targeting 6830 (40-DMA Stalls / Stochastic 30%) then 6810 (Pivot S1)
Wednesday is the big one this week. FOMC Minutes at 2 PM will be the tell. The Waller/Miran dissent gives us a clear lens to watch through. If the Minutes reveal those two had broader support or if the discussion leaned more dovish than the vote suggested, this market will squeeze hard. If the language is hawkish and inflation-focused, the 6800 level is coming fast. Position accordingly and let the data do the talking.
Good Luck !!!
Wednesday is where things get interesting. We have Durable Goods at 8:30 ET (forecast -1.7% vs a massive 5.3% prior, so expect a swing), Building Permits, then Bowman at 1:00 PM, and the big one, FOMC Minutes at 2:00 PM. This is a Jan meeting where Waller and Miran dissented wanting a 25bp cut against a 10-2 hold, so the language around that debate should give us some fireworks. Markets are pricing 90% chance of a hold at the March meeting, meaning any dovish surprise in the Minutes could trigger a squeeze.
News & Sentiment Analysis:
Starting with Tuesday's session, this was as thin as expected coming off a holiday weekend. Trading volumes were 60-65% below average across major venues, with the market spending the entire session in a tight band around 6855. The takeaway here is that the bearish breakdown from 7000 has stalled, but we haven't seen any meaningful buying interest either. We are just sitting in no man's land.
From the Fed, Daly was out with several comments noting the economy feels well supported for businesses, demand uncertainty has recently changed to cautious optimism, and that businesses are seeing a buyer's market for labor. She also flagged that the lack of jobs for new grads is partly cyclical and partly because employers are uncertain about AI's impact. Nothing market-moving, but the tone leans slightly dovish since acknowledging labor softening.
The NVDA-META partnership is the biggest corporate story heading into Wednesday. META will deploy millions of NVDA chips as part of a multiyear deal spanning on-premises, cloud, and AI infrastructure. This is a meaningful commitment that reinforces the AI capex theme and should provide near-term support for both names and the broader AI complex. However, the counter-narrative is still alive. The Wall Street wrap noted that AI disruption fears continue to weigh on software names, with a clear divergence between semiconductor resilience and software sector weakness.
Fitch dropped some macro headlines on the fiscal side. They noted the Trump administration is expected to use alternative authorities to impose tariffs if needed, and the US government shutdown underscores fiscal deficit polarization. Neither is immediately market-moving, but it keeps the tariff and fiscal risk themes simmering in the background.
Institutional analysis on the FX side notes that EURUSD resting offers have been brought lower over the past week to 1.1865/70 from 1.1880/95, with a patient approach of waiting for supportive price action before re-entering long. On sterling, UK data continues to disappoint with the BOE's own expectations running softer than economists, suggesting near-term rate cuts may come earlier than planned. Dollar-Yen, the market appears overly short dollars around 152, with 155 noted as a key stop level.
On the tariff front, institutional scenario analysis puts a 64% probability on tariffs being struck down by SCOTUS but immediately replaced (SPX +0.75-1% initially then fade), 26% on tariffs being upheld (SPX down 30-50bp), and 9% on the most bullish outcome of tariffs being replaced only after mid-terms. Bessent has publicly stated the administration can replicate tariffs even if SCOTUS strikes them down, so the risk is less about the court outcome and more about the economic drag in the meantime.
Overnight data flow is light with China on holiday. UK CPI is expected at 3.0% vs 3.4% prior, a meaningful deceleration that would support BOE rate cut expectations. French CPI and ECB's Villeroy speaking round out the European session. RBNZ cut rates as expected to 2.25%.
Options and positioning wise, the 10-year yield sits at 4.06% which has stabilized after the post-CPI drop. DXY is at 97.13, essentially flat. Crude at $62.15, continuing to slide on Iran nuclear talk progress and OPEC output hike expectations. VIX at 20.30 which is notably elevated for a market that is not crashing, suggesting hedging demand remains strong.
Forecast:
• Overnight: Quiet session likely with China on holiday. NVDA-META news may provide slight lift, expecting range of 6845-6875
• Morning Session: Data-heavy open. Durable Goods at 8:30 AM will set the early tone. A miss (weaker than -1.7%) could spark a relief bid on rate cut hopes. A beat would add to the growth-is-fine narrative and keep rates concerns alive
• Afternoon: Bowman at 1:00 PM is the appetizer. FOMC Minutes at 2:00 PM is the main event. Expect positioning and volatility to pick up significantly after 2 PM
• Daily Close: Higher volatility close expected. Direction depends entirely on FOMC Minutes tone. Lean slightly bearish into the release with potential for a sharp move in either direction
• Expected Range: 6790 to 6910 (based on 14-Day statistical range of ~92 pts, with FOMC Minutes volatility premium)
• Most Likely Path: Sideways to slightly higher into 8:30 AM data, then choppy into 2 PM FOMC. Post-Minutes move likely 40-60 points in one direction. Bias is for a quick selloff toward 6810-6830 on hawkish language, or a squeeze back to 6900+ if the dissent language suggests more dovish tilt
Wednesday Events:
• 02:00 ET: UK CPI YoY (Forecast: 3.0%, Prior: 3.4%) + UK Core CPI, PPI
• 03:30 ET: ECB's Villeroy Speaks
• 08:30 ET: Building Permits (Jan) (Forecast: 1.400M, Prior: 1.411M)
• 08:30 ET: Durable Goods Orders (Jan) (Forecast: -1.7%, Prior: 5.3%) - potentially big swing
• 13:00 ET: Fed's Bowman Speaks
• 14:00 ET: FOMC Meeting Minutes (KEY EVENT - Jan meeting, Waller/Miran dissent language critical)
• 16:00 ET: TIC Net Long-Term Transactions (Dec)
• 16:05 ET: EBAY earnings (EPS: $1.35, Rev: $2.87B)
• 16:30 ET: API Weekly Crude Stock (Prior: +13.4M build)
• Thursday 07:00 ET: WMT earnings (EPS: $0.73, Rev: $19.06B)
Resistance:
• 6865-6870 - Tuesday High / ONH / Y-VAH cluster. First hurdle for any upside move, needs to clear this to get momentum
• 6883-6885 - Friday's High (PDH). This is the level sellers defended last week, a clear rejection zone
• 6900-6908 - Pivot R1 (6900.33) / 1 Standard Deviation Resistance (6908). Psychological level and first real computed resistance
• 6928-6935 - 38.2% Retracement from 4-Week High / RSI at 50% / 20-DMA (6935) convergence. A reclaim here shifts intermediate bias
• 6940-6947 - Pivot R2 (6940) / 18-DMA crossover / 40-DMA (6947) convergence. Major resistance cluster, all short-term MAs sitting here
Support:
• 6845-6850 - Pivot Point (6845.67) / Y-POC (6854.50) cluster. Current battleground, holding for now
• 6830-6839 - Stochastic 30% level (6838.95) / 40-DMA Stalls (6830.50). First real support test below the pivot
• 6806-6813 - Pivot S1 (6805.83) / 1 Standard Deviation Support (6812.79) / Target Price (6819.83) / 50% Retracement from 13-Week range. Major support zone
• 6777-6793 - 3 Standard Deviations Support (6777) / 2 SD Support (6793). Deep support that would indicate extreme selling
• 6751-6758 - Pivot S2 (6751.17) / 1-Month Low (6751.50) / 38.2% Retracement from 13-Week Low. Bears need a close below here to confirm breakdown
How I'm seeing it:
• Bearish bias remains intact below 6900. Price is below all short-term moving averages (5/20/50 DMA all above at 6875-6935), directional readings are strongly negative with -DI at 27.83 vs +DI at 5.33, and composite indicators have shifted from Buy (last month) to 40% Sell
• Tuesday's 16-point range tells us the market is coiling for a move. Wednesday's data and FOMC Minutes should be the catalyst that breaks this range
• Upside scenario: If FOMC Minutes reveal more dovish dissent or language suggesting rate cuts are closer, we could see a squeeze to 6900-6910 quickly. Key level to watch for sustained bullish reversal is 6935 (20-DMA)
• Downside scenario: Hawkish Minutes plus weak Durable Goods could push us to 6810-6830 where Pivot S1 and the Target Price cluster. Below there, 6780-6790 would be the 4H discount zone target
• NVDA-META partnership provides a floor for AI names, but the broader AI disruption fear in software is keeping risk-off sentiment elevated (VIX 20.30)
• Primary Setup: Short from 6883-6890, stop 6915, targeting 6830 (40-DMA Stalls / Stochastic 30%) then 6810 (Pivot S1)
Wednesday is the big one this week. FOMC Minutes at 2 PM will be the tell. The Waller/Miran dissent gives us a clear lens to watch through. If the Minutes reveal those two had broader support or if the discussion leaned more dovish than the vote suggested, this market will squeeze hard. If the language is hawkish and inflation-focused, the 6800 level is coming fast. Position accordingly and let the data do the talking.
Good Luck !!!
info@algoindex.com, algoindex.com | Join our free trading community: facebook.com/groups/1256769122661043
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.
info@algoindex.com, algoindex.com | Join our free trading community: facebook.com/groups/1256769122661043
Penafian
Maklumat dan penerbitan adalah tidak bertujuan, dan tidak membentuk, nasihat atau cadangan kewangan, pelaburan, dagangan atau jenis lain yang diberikan atau disahkan oleh TradingView. Baca lebih dalam Terma Penggunaan.