Fed Lowers 1/4 Point, Future Cuts Data Dependent

Index Futures Net Changes and Settlements:

Foreign Markets, Fair Value and Volume:

• In Asia 8 out of 11 markets closed lower: Shanghai Comp -0.81%, Hang Seng -0.76%, Nikkei +0.09%
• In Europe 9 out of 13 markets are trading higher: CAC +0.48%, DAX +0.22%, FTSE -0.23%
• Fair Value: S&P +0.39, NASDAQ +10.49, Dow -38.64
• Total Volume: 1.94 million ESU & 392 SPU traded in the pit

_{*As of 7:00 a.m. CST}

Today’s Economic Calendar:

Today’s economic calendar includes the Challenger Job-Cut Report 7:30 AM ET, Jobless Claims 8:30 AM ET, PMI Manufacturing Index 9:45 AM ET, ISM Mfg Index 10:00 AM ET, Construction Spending 10:00 AM ET, EIA Natural Gas Report 10:30 AM ET, Fed Balance & Money Supply 4:30 PM ET.

S&P 500 Futures: Fed FireWorks, First Rate Cut In 10 Years

[gview file=”https://mrtopstep.com/wp-content/uploads/2019/07/monetary20190731a1.pdf”]

The S&P futures (ESU19:CME) traded 3016.50 on Wednesday’s 8:30 CT futures open, and sold off down to 3009.25 at 9:33 am. After the low, the ES traded back up to 3018.50, then sold off down to 3012.25, rallied up to a lower high 3016.75.25, and then sold off down to a new low 3008.00, before trading back up to another lower high at 3016.00. 

After the push back up, the ES sold back off down to 3009.50, then rallied to 3013.75 just before the fed lowered interest rate by 1/4 point. Once the headline hit the tape, the ES sold off and held the 200 day MA at 3005.75, rallied up to 3011.75, and then sold off down to its daily low 3004.50. After the low the ES ‘double topped just a few ticks below the vwap at 3014.25, and pulled back down to 3007.00 at 1:25 CT. Needless to say, it was choppy before the fed announcement, and after the headlineshit. 

The ES rallied up to 3012.75, and then got hit by a sell program just after 1:30 that pulled the futures back down to new lows 2995.25 at 1:40, and then accelerated all the way down to 2957.75, down over 50 handles on the day.

The MiM came out showing over $2 billion to sell, and as it started to pair back the ES traded back up to 2983.00, pulled back a few handles, and then shot up to 2995.00. After a small selloff down to 2982.00 the ES traded all the way back up to 2999.00 at 2:30, and traded down to 2989.00 at 2:45.The futures then traded 2993.25 as the 2:45 cash imbalance showed $1.8 billion to sell, then traded 2979.00 on the 3:00 cash close, and settled at 2978.75 on the 3:15 futures close, down 36.50 handles, or 1.21% on the day. 

In the end it was a very volatile day. From its peak to its low the ES sold off 62 handles and bounced 40 handles. In terms of the markets overall tone, it went from semi weak to very weak in just a matter of minutes, but also staged a big late day rip. In terms of the days overall trade 1.9 million contracts traded, over double Mondays volume. 

You had to know this was coming from the ‘Donald’: 

1)Donald J. Trump @realDonaldTrump 29m What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle which would keep pace with China, The European Union and other countries around the world….    

2) Donald J. Trump @realDonaldTrump 29m ….As usual, Powell let us down, but at least he is ending quantitative tightening, which shouldn’t have started in the first place – no inflation. We are winning anyway, but I am certainly not getting much help from the Federal Reserve!

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As always, please use protective buy and sell stops when trading futures and options.

_{Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. Any decision to purchase or sell as a result of the opinions expressed in the forum will be the full responsibility of the person(s) authorizing such transaction(s). BE ADVISED TO ALWAYS USE PROTECTIVE STOP LOSSES AND ALLOW FOR SLIPPAGE TO MANAGE YOUR TRADE(S) AS AN INVESTOR COULD LOSE ALL OR MORE THAN THEIR INITIAL INVESTMENT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.}