Wednesday, July 29, 2020

SPX Update: Fed Day

Last update noted that the market had tested the outlined support zones, and that they had held their first test.  Those zones have continued to hold (so far), and SPX actually tested the blue trend line a second time right at the close yesterday.  Futures are indicating a gap up open, so the market is reacting to that line again.

In conclusion, the market really hasn't done anything since last update, but has remained rangebound, so there's nothing much to add.  Bears still need to break (and hold the break) of support.  Today, the Fed is due to give their weekly bi-annual quarterly report for the month, so the market is probably waiting on that before breaking solidly in one direction or the other. 

Incidentally, current expectations are that the Fed will continue to do things, and that Powell will probably use the word "tools" at least once.  Some analysts fear that if he uses the word "tools" more than three times, that could signal a more dovish stance, which could contribute to at least four hours of additional Fed-related discussion on CNBC.  We'll keep our fingers crossed that this does or does not happen, depending on our mood.  Trade safe.

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