U.S. stocks rallied propelled upward as Treasury yields fell following comments from Federal Reserve Governor Christopher Waller, who indicated he would support holding interest rates steady at the upcoming policy meeting later this month.
The probabilities for a rate hike in the next FOMC meeting fell to 50% today, from 63% yesterday, a major change that fueled the stock market.
On the macro site, the ADP private sector payrolls report showed an increase of 38,000 jobs in August, coming in below estimates and providing further evidence of a cooling labor market, a factor that also favors continuation in interest rates instead of a rate hike.
With that said, the rally left a new gap open for the SPX at 7,681 and for the Dow Jones at 53,227; bad news became good news and the coming price action has a new magnet below that we have studied is extremely likely to be filled.
Yesterday, 7,660 was set as the central daily level for the ES=F today, meaning that the price was bullish above it, and bearish below it, the number was the same for the SPX. The bullish move came with conviction recovering the Central Weekly Level (CWL), suggesting a flip in momentum and given the gap, likely continuation of choppy price action.
Let’s don’t fight price action, but let’s be aware of the implied risk of having two magnets below the current move; these magnets belong to the SP500 and the Dow Jones, we’re not talking about PLTR, MU, SNDK, or a micro-cap. For that reason risk awareness is prudent.
From our watchlist, the week is about to end with several moves that were anticipated, like the bullish resolution for TSLA, SPCX, META, IBIT, AAPL, NFLX, SLV, and GLD. I’d like to make a special mention for WMT gaining +5%.
Having a watchlist of megacaps and high volume ETFs with selected setups for the week helps long-term investors and traders outperform the market. I’ve been bullish on the tickers mentioned, cautious on the indices, and bearish on specific names, while keeping others on watch for a breakout.
Today’s agenda
The Most Important Chart Today
Daily Plan for SPX and ES=F
Combined levels (including daily levels) for SPX, ES=F, AMZN, TSLA, MSFT, AAPL, NVDA, GOOG, and META.
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The Most Important Chart: Key Resistance Tested
Bullish continuation depends on holding the central daily levels below, but also on breaking through this resistance: