According to the CME FedWatch Tool, there is a 67% probability the Fed cuts by 50bps tomorrow

Bill Baruch will be on the CNBC Halftime Report for the hour from Huntington Beach, California. The Federal Reserve’s pivotal policy decision is due tomorrow. Make sure to tune in!

E-mini S&P (September) / E-mini NQ (September)

S&P, yesterday’s close: Settled at 5699, up 8.25

NQ, yesterday’s close: Settled at 19,433.00, down 97.25

E-mini S&P and E-mini NQ futures started the week on their back foot. Yesterday, we noted, “From a purely technical perspective, both the E-mini S&P and E-mini NQ could spend a day or two digesting the recent run, maybe pulling back slightly, and this would be very healthy.” After pinging support perfectly yesterday morning, E-mini S&P futures closed positively and are setting new swing highs ahead of the opening bell. Price action is testing rare major four-star resistance in the September contract at 5661-5665, which aligns with the gap from the end of month, August 30th close. Today, we roll to December, and this level translates to 5722.50-5726.

Upgrades, partnerships, and news across the tech space (HPE, DELL, INTC, AMZN, MSFT) are fueling strength in E-mini S&P and E-mini NQ futures overnight. We see two clear tailwinds from here. First, the Federal Reserve begins its two-day policy meeting today. According to the CME FedWatch Tool, there is a 67% probability the Fed cuts by 50bps tomorrow at 1:00 pm CT. Second, the contract roll from September to December referenced above places the now front-month at a record high and above the July level of 5721.25. Ironically, this aligns with the end-of-August settlement resistance for the December-specific contract. We believe the record high on the roll creates FOMO momentum into and potentially around the Federal Reserve. It is now up to the Federal Reserve to deliver a dovish policy move that garners strength into quadruple witching Friday. However, from there, we cannot ignore negative seasonality.

Updated December levels are below. As today unfolds, our Pivot and point of balance will be critical as helping stoke higher prices. Continued action above 5707 in the E-mini S&P and 19,681-19,700 in the E-mini NQ is favorable to the bull camp.

Finish the report to unveil our technicals: According to the CME FedWatch Tool, there is a 67% probability the Fed cuts by 50bps tomorrow - Blue Line Futures

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