Understanding Risk-Assets Ahead of Powell | Morning Express

30-year Bond w/ 50dma

Russell 2000 w/ 50dma

- On Monday, we discussed how expectations for Jackson Hole had shifted dovishly after Dallas Fed President Kaplan’s comments. Last Friday, he pointed to uncertainties related to the Delta Variant although China, the U.K., and Europe broadly have all flattened the curve within 30 days. Read our thoughts here.

- On Wednesday, we discussed the House paving the way for President Biden’s $4 trillion budget and how the lingering debt ceiling impacts Treasury issuance. Read our thoughts here.

- The Jackson Hole Symposium will be fully virtual tomorrow. Fed Chair Powell’s speech at 9:00 am CT is the main event.

- Kansas City Fed President George said this morning, “good argument for tapering more quickly than before and decreasing bond purchases should begin this year”.

- South Korea surprised with a 25 basis point interest rate hike

- ECB Minutes published at 6:30 am CT. Little market reaction

- The second look at Q2 GDP, and weekly Jobless Claims are due at 7:30 am CT.

- The U.S Treasury will auction $62 billion of dreaded 7-year Notes today. Yesterday, they auctioned $61 billion of 5-year Notes with a higher yield. The 10-year yield has risen more than 8 basis points this week to a high of 1.36%. 10-year futures traded through the 50-dma for the first since June.

- Nations across Europe have stopped flights from Afghanistan on reports of a potential terror attack.

- Salesforce topped earnings after the bell yesterday, +2.5%.

- True brick and mortar retail businesses have highlighted the last two days. Williams-Sonoma is +15% after last night’s blowout report. Dicks gained 13% after reporting Tuesday. However, Dollar General is nearly 4% after sales fall.

- TD beat this morning. Marvell, Dell and Peloton report after the bell.

- Don’t miss yesterday’s Midday Market Minute

E-mini S&P (September) / NQ (Sept)

S&P, yesterday’s close: Settled at 4493, up 10.50

NQ, yesterday’s close: Settled at 15,364.25, up 8.75

- Price action holding above major three-star supports in each the S&P and NQ aligning with previous record highs at 4472.25-4474 and 15,124-15,150

- Russell 2000 has led a cyclical charge this week, but price action came in late to settle at the 50-day moving average. This has acted as resistance, RTY not closed above since July 12th

- ES faces psychological 4500 resistance

- NQ faces our major three-star level at 15,403, has so far contained rallies

Bias: Neutral/Bullish

Resistance: 4493*, 4498-4500**, 4507**, 4525.75***, 4540.25-4543.50***

Pivot: 4489

Support: 4480.75**, 4472.25-4474***, 4462.50-4464**, 4454.25***, 4434-4437***, 4423-4427.50**, 4411.75-4416.75***

NQ (September)

Resistance: 15,403***, 15,458**, 15,490-15,500**, 15,634***

Pivot: 15,350

Support: 15,280-15,312**, 15,220-15,250**, 15,124-15,150***, 15,086**, 14,997-15,001***

Crude Oil (October)

Yesterday’s close: Settled at 68.36, up 0.82

- Strong settlement and breach of crucial resistance, but not decisively and price action has gapped lower on daily

- Yesterday’s headline EIA data was slight bullish, but priced in through rally this week

- Momentum indicator at 67.85; below here exudes some near-term exhaustion, could open door to 66.00 to digest the week’s gains.

Bias: Neutral

Resistance: 68.03-68.21***, 69.02-69.39***

Pivot: 67.85

Support: 66.93**, 65.94-66.00***, 65.41-65.64**, 65.14**, 64.34-64.52***, 63.50***

Gold (December) / Silver (September)

Gold, yesterday’s close: Settled at 1791, down 17.5

Silver, yesterday’s close: Settled at 23.775, down 0.119

- Gold and Silver holding in positive territory on the week, but off highs

- U.S. Dollar weakness underpinning each, but rising yields a headwind

- Momentum indicators at 1790 in Gold and 23.78 in Silver; will act as Pivot and point of balance

- Major three-star support in Gold at 1780-1784 has been big this week

Bias: Neutral

Resistance: 1794.7*, 1798-1801.5**, 1808.9***, 1822.5**, 1835-1840***

Pivot: 1790

Support: 1780-1784***, 1760-1763.1***

Silver (Sept)

Resistance: 24.07-24.32***, 24.51-24.65***

Pivot: 23.78

Support: 23.59-23.65**, 23.21**, 22.97-23.00***, 22.28***

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