Market NewsPosted by Team TopstepFebruary 22, 2021
Stocks Are Nervous Ahead of Powell Testimony
The S&P 500 futures market hasn’t closed lower five consecutive days since October 2020, and Monday’s dip went so far as to test the 20-day moving average. Even though the ES closed above the pivotal 20-day MA, the late-day selling pressure seems to be turning into a regular event and stocks appear to be nervous ahead of Powell’s testimony on the economy and monetary policy Tuesday.
Dems say they’re hard at work on a COVID relief bill
“U.S. equity markets have started the week on their back foot as rising Treasury yields weigh on the risk landscape. Although last week’s push and pull held a floor of support, both the S&P and Nasdaq came to an unenthusiastic finish after decisively breaking below our momentum indicators again midday Friday. “
“Crypto is broadly selling off after a weekend rally saw Bitcoin (BTC) and Ethereum (ETH) make new record highs. After a week in which it added about USD 18 billion to its market cap, Binance Coin (BNB) saw the greatest loss in the Top 10 this morning.”
Economic Calendar for Tuesday, February 23
Redbook – 7:55 AM CT
Case-Shiller Home Price Index – 8:00 AM CT
FHFA House Price Index – 8:00 AM CT
Consumer Confidenct – 8:00 AM CT
Jerome Powell Speaks – 9:00 AM CT
Richmond Fed Manufacturing Index – 9:00 AM CT
Chart of the Day
S&P 500 Futures Down 5 In A Row
If you separate the overnight session from regular trading hours (RTH), Monday’s RTH in the E-Mini S&P 500 futures could be considered an inside session. After trading in a 53 handle range before the 8:30 CT opening bell, the ESH was held to just a 27 handle range during RTH.
When volume started drying up at the beginning of February, the 20-day moving average looked to be the popular target for many day traders. In typical ES fashion, a few weak shorts needed to be shaken off the stick before the dip. Monday’s overnight low tested the 20-day MA but did end up closing the session just above it. Looking at the 30-minute chart above, you can clearly see a decent amount of selling pressure on the close 4 of the last 5 trading days.
The last test of the 50-day MA was right at the beginning of February. After that, it was off to new all-time highs again. Keep an eye on Coach Hoag’s weekend kickoff low at 3858 as a potential area of importance Tuesday as Fed Chairman Jerome Powell testifies on the strength of the economy.
For more trading news and information ahead of the opening bell, subscribe to theDaily Market Forecast with John Hoagland and Dan Hodman each morning at 8:00 AM CT.