E-mini S&P and NQ Futures Rally into Fed Decision Day

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

S&P, yesterday’s close: Settled at 5958.25, up 146.00

NQ, yesterday’s close: Settled at 20,894.00, 552.25

E-mini S&P and E-mini NQ futures continued the face ripping rally through yesterday’s close. While the E-mini S&P has decisively broken out above the 5927.25 October 17th record high, the E-mini NQ has not cleared its 21,237.75 July 11th record. With the E-mini NQ nearly half of one percent away, it makes for a terrific storyline into today's Federal Reserve policy decision at 1:00 pm CT. The FOMC is expected to cut rates by 25bps today with a 100% probability, according to the CME FedWatch Tool. The committee’s communication via statement and Fed Chair Powell's press conferecnce will be critical.

Today’s economic calendar showed a bit of reversal in what has been better skewed Labor/Productivity data with Q3 Nonfarm Productivity rising by +2.2% versus +2.6% expected and Q3 Labor Costs rising by +1.9% versus +1.1% expected. Most importantly, Q2 Labor Costs were revised from +0.4% to +2.4%. This is inherent of inflationary pressures. Initial Jobless Claims came in at 221k and were in line with expectations given last week’s revisions.

We will maintain a slight Bullish Bias, simply because the volatility should be navigated with caution. The path is very clear, we have major three-star support at yesterday’s settlement, we see this as a ‘buy the first test’ level, and believe the melt-up continues while above there. E-mini NQ futures face resistance aligning with its record closing level at 21,160-21,179. For the E-mini S&P, we are keeping it simple, while above rare major four-star support at...

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