open before Monday's open 📈 - Sunday Report

September 17, 2023

How’s it going traders.

We’re back again with another big Sunday report in your inbox before market open tomorrow.

Big week ahead with the FED rate hike decision on Wednesday and other key news in the pipeline.

We cover how we plan on navigating it all.

Let’s get into it…

Impact Snapshot

  • US Housing Starts - (Tue.)

  • Fed Rate Decision - (Wed.)

  • Powell Press Conference - (Wed.)

  • Initial Jobless Claims - (Thu.)

  • U.S. Existing Home Sales -(Thu.)

  • Fed Factory Index - (Thu.)

  • Manufacturing PMI - (Fri.)

Market Evaluation

Welcome to the most eventful week of the month as Jerome Powell and the Federal Reserve will take center stage in the week ahead when the central bank makes its next policy decision.

The Fed is scheduled to meet on Sept. 19 and 20 followed by a press conference with Fed Chair Powell at 2:30 p.m. ET on Wednesday.

Investors expect the FOMC will hold interest rates steady in a benchmark range of 5.25% to 5.5% to see if inflation continues to cool.

When he paused interest rate hikes in July for the first time in 10 meetings, Powell indicated the Fed would remain data-dependent.

He highlighted several data releases the central bank had eyes on for further insight on the labor market and inflation's cooldown.

The data since has shown easing core inflation and a cooling labor market, both outcomes the Fed wants.

We will monitor the reports of the week and adjust the trading zones accordingly.

As always, markets like to do the exact opposite of what the majority believes so stay sharp and look at the bigger picture.

Markets Breakdown

We put context around price. There is no real understanding until you can view price within its context. 

There was a multi-day balance prior to Thursday’s breakout in order to find acceptance on the prior 5-day balance range above.

When we look at balance and price attempting to breakout from, we monitor if the breakout fails or it shows continuation.

Thursday’s upside breakout from the 6-day balance failed dramatically on Friday.

A trend is a divergence away from value. A trending market ends when price begins to auction back and forth between two clear reference points. Markets trend only 20% of the time.

Thursday’s RTH session was a trending day with price closing above the initial balance as buyers had control thru-out the session, forming higher highs and a new weekly high outside of the prior multi-day balance.

Post-market and Asia sessions were ranging inside the highs of this upside until the late hours of the Europe hours before the open, where aggressive market participants pushed the prices back inside the multi-day range.

The RTH open on Friday was quite eventful and presented significant challenges for the buyers.

The market started selling out the gate with the initial balance formation outside the value area of Thursday, making a double distribution trending day to the downside, a complete rollover of the attempt to breakout from balance.

When a market is out of balance, it auctions away from the previous POC to find new accepted value.

Heading into next week, the most significant level that we will be looking is the ability for the zone of 4483 to hold the selling pressure.

Finding acceptance bellow 4483 would see further downside continuation towards the lower balanced area.The ability to hold and range above 4483 will results into price trying to explore the upside trading range highs with an attempt for a new higher high.

The level areas we will be looking heading into the next Week:

  • Upside Levels: 4520/4543/4558/4577

  • Downside Levels: 4483/4464/4450/4420

That wraps up this week’s Sunday report.

We’ll be back again on Tuesday to prep you before the FED decision Wednesday.

Enjoy the rest of your Sunday!

-The QuantVue Team

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