What to expect of the Emini S&P futures into the Fed rate announcement

Treasury yields moved higher this past Friday as futures and equity market participants ease up on the bullish sentiment that drove markets higher past the CPI report on Wednesday while eagerly looking forward to the Fed decision, due next Wednesday with broad expectations of the Feds cutting by 25 basis points while keeping a hawkish tone on the need for further cuts as we move into the new year. The yield on the 2YT note ticked above 4.24% level, while the yield of 10YT note sniffed out the 4.40% level. As always, upward ticking yields keep the pressure on equities as year-end rally momentum focused participants try to brush the yield scenario aside. Tech pushed higher on Friday while the momentum waned into the session close. The daily chart of the ES mapped from early August pullback is indicative of us needing to push things up beyond 5130 in order to complete the current move. 

Daily Chart of the Emini S&P futures (ESZ24) 

The 5-day volume profile however, shows that the value which attempted to establish higher after the CPI report failed to take out the prior high and retraced that entire reactionary move into the Friday settlement. 

Volume Profile

Lastly, the hourly chart below is indicative of the markets wanting to hold 6040 area which we held on the last rejection above 6111. In summary, what we see is the possibility of some additional consolidation aided by weakness overall in Tech as profit taking continues into the Fed rate decision on Wednesday. In short, keep an eye on the 6020~6040 area and if that price band does not hold, we may seek value lower in the 5960~5980 price band heading into economic data for this week.

Hourly Chart (ESZ24)