Your MUST-READ Morning Stock Futures Cheat Sheet: Bulls retaining short term control

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The Precise Take – Bulls retaining short term control

Big Picture Analysis:  After a sharp selloff yesterday morning on a very disappointing Consumer Confidence print, bulls bought the dip and rallied the ES to 1218.75 in the late afternoon, only to suffer a fifteen handle pullback in the final 25 minutes of futures trading.  Nonetheless, overnight, the ES was back up to test yesterday’s high, and a slight miss on ADP this morning (as a bellwether of Friday’s big employment report) has not seemed to be cause for concern.  Yesterday’s FOMC Minutes did not turn up anything earth-shattering, but we do note the disclosure of a secret videoconference meeting held on August 1 to discuss potential fallout from either a debt ceiling breach (the increase was voted into law the next day) or a major ratings agency downgrade of US debt (which would occur four days later).  The last such intermeeting videoconference was conducted mid-October, 2010, a few weeks before the formal announcement of QE2.  All the  chatter suggests further easing at the September 20-21 is being priced into the markets and expectations have been guided high.  Even if the risk markets do indeed get their wish in three weeks, we would be surprised if there were not, in the meantime, another nasty selloff to retest prior lows in the ES, with perhaps a capitulation shakeout.  For the time being, bulls retain short term control, and we would simply warn to be circumspect with longs on a price stall of a few days or on a strong down move on bad news that is not quickly reversed. Major resistance remains at 1230 and 1240 (basis ES).

Trading Today:   Below are marked the support and resistance areas.  Chicago PMI (released to subscribers at 9:42 am, three minutes prior to the public) is often a market mover, if for no other reason that it is often out of consensus.

Today’s  Scheduled News (all times EDT)

Major Market Movers
ADP Employment at 8:15 am

Chicago PMI at 9:42 am

Minor Market Movers
Factory Orders at 10:00 am
EIA Petroleum Stats at 10:30 am

Tomorrow’s Scheduled News

Major Market Movers
Jobless Claims at 8:30 am
ISM Mfg Survey at 10:00 am

Minor Market Movers
Productivity and Costs at 8:30 am
Construction Spending at 10:00 am

Click above images for larger charts.