Market analysis for Sept. 18th, 2024

Good morning all! Welcome to FOMC day! 

Todays usually a great day for us, opportunity wise. We do a lot of sitting on our hands until Powell speaks and the Algos start doing their thing. I would imagine today will be no different. 
Yesterdays trading was actually pretty good as far as damage control went. My net liq was us $75 dollars at the end of the day. I'll take it as a victory as we had several trades that needed work. See our results below:

Our trade docket for today: Scalping. We've still got our short /MNQ position and I'll look to cover that again today. We should have an opportunity during Powells speech to scalp the QQQ's so be ready for those. Corn (/ZC) looks ready to roll on the cover. IWM needs to be worked. QQQ's will need to be worked again and, or course, all our 0DTE's.

No directional bias or support/resistance areas today. The Algos are going to take us where they take us so we'll just remain flexible and sit on our cash until we see an opportunity today. 

​September S&P 500 E-Mini futures (ESU24) are up +0.10%, and September Nasdaq 100 E-Mini futures (NQU24) are up +0.09% this morning as caution prevailed ahead of the Federal Reserve’s interest rate decision, with investors split on the size of a potential rate cut.
In yesterday’s trading session, Wall Street’s major averages closed little changed. Moderna (MRNA) advanced over +4% and was the top percentage gainer on the Nasdaq 100 after announcing that Health Canada approved its updated COVID-19 vaccine, SPIKEVAX KP.2 variant, for preventing COVID-19 in individuals six months of age and older. Also, Intel (INTC) rose more than +2% and was the top percentage gainer on the Dow after the chipmaker announced a multibillion-dollar agreement to make custom artificial intelligence chips for Amazon’s cloud computing division while also revealing plans to turn its Intel Foundry into a separate subsidiary. In addition, Hewlett Packard Enterprise (HPE) climbed over +5% after BofA upgraded the stock to Buy from Neutral with a price target of $24. On the bearish side, Accenture (ACN) fell more than -4% and was the top percentage loser on the S&P 500 after Bloomberg News reported that the IT and consulting services provider plans to push back most of its staff promotions by six months.
Economic data released on Tuesday showed that U.S. retail sales edged up +0.1% m/m in August, defying expectations for a -0.2% m/m decline. At the same time, U.S. August core retail sales, which exclude motor vehicles and parts, crept up +0.1% m/m, weaker than expectations of +0.2% m/m. In addition, U.S. industrial production climbed +0.8% m/m in August, stronger than expectations of +0.2% m/m.
“Another Goldilocks number,” said David Russell at TradeStation. “Retail sales are strong enough to keep us out of recession, but not strong enough to stop rate cuts.”
Today, all eyes are focused on the Federal Reserve’s monetary policy decision later in the day. While the Fed is widely expected to implement its first interest rate cut since 2020, market participants are debating whether a quarter-point reduction will be deemed sufficient for an economy showing signs of slowing or if policymakers will opt for a half-point cut instead. Investor attention will also be on the central bank’s quarterly “dot plot” in its Summary of Economic Projections and Chair Jerome Powell’s post-decision press conference.
Meanwhile, U.S. rate futures have priced in a 37.0% chance of a 25 basis point rate cut and a 63.0% chance of a 50 basis point rate cut later today.
A survey conducted by 22V Research revealed that market reaction expectations to the Fed decision hinge on the bets regarding the size of the cut. Investors who expect a 25 basis point reduction are divided on whether that cut would trigger a “risk-on” or “risk-off” reaction. At the same time, those wagering on a 50 basis point cut believe a smaller Fed move would be “risk-off.”
On the economic data front, investors will focus on the U.S. Building Permits (preliminary) and Housing Starts figures, scheduled for release in a couple of hours. Economists forecast August Building Permits to be 1.410M and August Housing Starts to be 1.310M, compared to the previous numbers of 1.406M and 1.238M, respectively.
U.S. Crude Oil Inventories data will be reported today as well. Economists estimate this figure to be -0.100M, compared to last week’s value of 0.833M.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.667%, up +0.64%.

Once again, the plan for us today is to sit on our hands until Powell starts speaking then pounce!!
​See you all in the live trading room.