Your MUST-READ Morning Stock Futures Cheat Sheet: Fed Day

The exclusive Markets Morning Report is supplied by The Precision Report.

The Precise Take – Fed Day

Big Picture Analysis:  Yesterday, the market exercised Buffet’s put and sold off hard after a brief opening upward spurt.   As we write, GDP was revised lower, a hair below expectations, and the ES has traded down through the 50% retracement at 1150.00 to 1146.50, a tick above Monday’s opening print.  Focus turns to Bernanke’s Jackson Hole speech, which will be released in text form at 10:00 am.  Most likely, he will present a “menu” of further easing options, similar to last year, but will not give a specific date or criteria under which the main course will be selected.  Inasmuch as this may be priced in, we are not as optimistic of new intermediate term rally getting underway, though the risk markets could very well rally short term.  Our CANSLIM friends have noted that yesterday was the second distribution day after the August 23 follow through  day (FTD), which signals an 80% chance of failure for the fledgling rally.  Leadership remains poor, so we will continue to be skeptical of any short term bounces.

Trading Today:   Below are marked the support and resistance areas.  Expect volatility after the speech is released and be prepared for sudden reversals, which are common on Fed-related days.  Also, Consumer Sentiment could move the markets at 9:55 am

Today’s  Scheduled News (all times EDT)

Major Market Movers
Consumer Sentiment at 9:55 am
Bernanke Speaks at 10:00 am

Minor Market Movers
Corporate Profits at 10:00 am

Tomorrow’s Scheduled News

Major Market Movers
Personal Income & Outlays at 8:30 am
Pending Home Sales at 10:00 am

Minor Market Movers
Dallas Fed Mfg Survey at 10:00 am

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