Index #ES_F #SPY Bias Update and Levels for Monday, September 14, 2015
Not expecting any major and/or meaningful moves in any index
ahead of the FOMC rate hike decision this week. ESZ5 +30-50pts or -30-50pts from where ESZ5 is current trading should and will likely mean absolutely
nothing ahead of this week’s FOMC due to the potential of a rate hike or not.
I still find it completely hilarious (as I have mentioned
before in a previous blog post) at how the entire/overall US stock market
remains 100% at the mercy to a +1/8th or +1/4th (.25) point
interest rate hike. I cannot stress enough that a .25pt rate increase will have
no dramatic negative impact to the US economy nor will it have any impact to
the 82% of Americans who do not participate in the US stock market.
Not only will a +.25 rate hike have zero impart to the US economy
a no .25pt rate hike this week (or in December) will not help any of the
concerns and uncertainty in global economies especially China. All a .25pt rate
hike is to US investors and trades is the likelihood and potential end to easy/free money and the beginning of the end to the “bad econ data is good
for stocks” era.
My current thoughts are Shorts are going to cover no matter if
the Fed does a rate hike or not due to no rate hike is good for stocks and if a
rate hike CNBC will then be none stop that a +.25pt rate hike equals and suggest the US
economy is now in the all clear.
Even if the initial reaction to rate hike is bearish I still
think the market will find a reason to rally before a real and meaningful trend
is determined. This means what will matter and be more important to me is the
follow through in either direction and/or rejection reversal post the rate hike
decision more so than the initial reaction.
For now the key ESZ5
areas I have an eye on pre-FOMC are 1970s-1975s
zone and 1918s-1915s zone, and
while in between these areas ESZ5 and
the indexes will be in wait mode for FOMC rate decision.
Post FOMC the only chance of follow through to new ATHs is once/if a Daily close above 2032s/33s. A rejection of 2032s/33s or if macro lower highs begin
to form below 2032s/33s my macro
bias will favor a real correction of 10% or more which will occur in the coming
weeks and will also occur during regular trading sessions rather than as a
pre-market short-lived flash crash.
If no Daily close above 2032s/33s
post the FOMC rate hike decision I will be looking for a Monday pre-market flash
crash low test followed by an October low test as well once if below the 1860s-1850s support zone.
ES/S&P500 emini
Futures still has a Daily -3Sigma
target below -1800 but (and of
course) there will definitely be potential for that to change if EZU5 turns to full bull mode post FOMC
rate hike decision.
Ethan Premock
Futures & Options Strategist
Hamzei Analytics, LLC
Hamzei Analytics, LLC
