Powell Plop

With the highly anticipated Powell Jackson Hole appearance less than two hours away, the market is already being dealt a downside blow with more China Tariff headlines.

The $SPY is down $3 from its pre-market highs, with Powell set at 10am to likely add more fuel to the downside bon-fire.

If Yellen or Bernancke was Powell today... I'd be fairly confident of a move higher for the markets.  Yet Powell as evidence by his most recent FED presser instills very little confidence when he speaks.  And as such, the odds favor a pull back today.

The problem is futures are already pulling back.  Just how much further can we fall.

I highlighted recently  the $SPY $294 level as the top side of a recent channel the market has been in.  Yesterday we hit $293.93 before sharply reversing course.

Strong support rests at $282.   If Powell pour a bucket of ice on rate cut prospects, things could get rather ugly, with the $SPY potentially hitting that $282 level today.

Or will Powell break from his mold, and help send the markets higher with a more dovish tone today?  Only Powell knows... and even then you can argue he really doesn't.

Rate cut odds remain nearly 100% for September.

And odds for two .25% cuts before years end are near 50% with  chances of three .25% cuts near 30%.

Let's see how that changes after Powell.

Powell Plop?  Or Powell Pop?


Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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