Market analysis for Aug. 21st, 2024

Welcome to Weds. traders! We had a good day yesterday. We left quite a bit of potential profit on the table but we also had two rolls we were working and they were getting to be a pretty big size so booking what we could made sense. Here's a look at how we did. One advantage of the way we trade multiple 0DTE's is that a new 0DTE that is offsetting another can sometimes be done without using additional Buying power, as was the case yesterday.

Taking a look at the markets. We took a pause yesterday but it wasn't too meaningful on the technicals. 

My bias today remains the same as yesterday. Neutral to slightly bullish. We've got FOMC mins. release today. I don't think that should be much of a catalyst but, you never know, until you know.

Again, you can see, there wasn't much accomplished yesterday by the bulls or bears.

​September S&P 500 E-Mini futures (ESU24) are trending up +0.17% this morning as market participants awaited an annual review of U.S. jobs data as well as the Federal Reserve’s July meeting minutes for further clues on the path of interest rates.
In yesterday’s trading session, Wall Street’s main stock indexes ended in the red. Boeing (BA) slid over -4% and was the top percentage loser on the Dow after the aircraft manufacturer paused flight tests of its 777X jetliner while it inspects cracks in a crucial structural component. Also, diabetes stocks lost ground on the news that Eli Lilly’s weight-loss drug Zepbound reduced the risk of diabetes by 94% in obese and pre-diabetic patients, with Insulet (PODD) slumping more than -6% to lead losers in the S&P 500 and Dexcom (DXCM) plunging over -6% to lead losers in the Nasdaq 100. In addition, Bank of America (BAC) fell more than -2% after an SEC filing revealed Berkshire Hathaway sold $550.7 million of its Bank of America stock holdings between August 15-19. On the bullish side, Palo Alto Networks (PANW) climbed over +7% and was the top percentage gainer on the S&P 500 and Nasdaq 100 after the cybersecurity company posted upbeat Q4 results and provided solid FY25 guidance.
“The momentum guys are driving the bus,” said Kenny Polcari at SlateStone Wealth. “Now the volumes have been trending lower as we move into the end of the month. Moves will be and are exaggerated as a result. And I think the recent rally is proof of that exaggeration.”
Fed Governor Michelle Bowman said Tuesday that she remains cautious about any shift in the Fed’s policy due to what she perceives as continued upside risks for inflation, warning that overreacting to any single data point could jeopardize the progress already achieved. “I still see some upside risks to inflation as supply conditions have now largely normalized and any further improvements to supply seem less likely to offset price pressures arising from increasing geopolitical tensions, additional fiscal stimulus, and increased demand for housing due to immigration,” Bowman said.
Meanwhile, U.S. rate futures have priced in a 69.5% probability of a 25 basis point rate cut and a 30.5% chance of a 50 basis point rate cut at the next FOMC meeting in September.
Today, investors will monitor the release of the Federal Reserve’s minutes from the July meeting, which may offer additional insights into the Fed’s next steps.
Also, market participants will be closely watching the release of preliminary benchmark revisions to U.S. employment data for the 12 months through March, scheduled for later in the day. Signs of weakness in the annual recalibration of U.S. payrolls could underscore the need for aggressive Fed rate cuts and evoke memories of the market turmoil in August following a disappointing payrolls report.
Goldman Sachs and Wells Fargo economists anticipate that payroll growth in the year through March was at least 600,000 weaker than currently estimated. While JPMorgan Chase forecasters predict a decrease of about 360,000, Goldman suggests it could be as large as a million.
On the economic data front, investors will likely focus on U.S. Crude Oil Inventories data, set to be released in a couple of hours. Economists estimate this figure to be -2.000M, compared to last week’s value of 1.357M.
On the earnings front, notable companies like TJX Companies (TJX), Analog Devices (ADI), Target (TGT), Snowflake (SNOW), Agilent (A), and Macy’s (M) are slated to release their quarterly results today.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.825%, up +0.08%.

Trade docket for today: /MCL, /MNQ scalping+QQQ's, CRM?, DELL?, FSLR, IWM, LEVI, M, PANW, PYPL, TGT, TJX, SNOW, ZM, WOLF, 0DTE's. 

Let's take a look at some key, intra-day 0DTE levels for me:
​/ES; Super tight range. Bulls need to push through 5646. Bears need to break down below 5614.

/NQ; As you can see, we've been in a very tight zone for a while now. Bulls need to break above 19940 and bears need to push below 19770.

Let's have a great day!