S&P 500 Futures Update: Are Interest Rate Cuts Real?

s&p 500 futures index rally trading price target chart june 5

News of interest rate cuts seems to be fueling the rally attempt we are seeing. S&P 500 futures are trying to lift for the second day in a row.

An interesting note via Zerohedge this morning discussed the difference between rate cuts for stimulative growth and debt market support versus a response to a recession.

It’s a very interesting morning from an asset positioning perspective.

We also see from OddStats on twitter that on days following big moves like Tuesday’s, we are likely to hold positions or press a bit higher before fading. 

So here is the takeaway: When you see me write two-three days in a row about a support bounce on the monthly chart and a potential squeeze as money sits on the wrong side of flow – this is the kind of outcome we see much of the time statistically. Media content today is mixed, in general, as market participants are likely shell shocked for the strength of move – WHICH OCCURS MOSTLY IN BEARISH TRENDS.

Tech continues to be weak relative to the other markets. We sit at prominent lower highs for the indices we watch. – This was what I wrote yesterday -“Remember we are in a bearish trend and if a lot of traders have piled in and the chart begins bouncing sharply, we will squeeze… DO NOT ANTICIPATE DECISIONS OF MARKET PARTICIPANTS – watch them and then follow along. This is our great strength not being money managers and hedge funds. We do not need to front run the moves. If you do it the first way, you’ll trade in front of a move and could get smashed (emotionally and otherwise) – and that will render you less effective as a trader in the longer term.”

As someone reminds me – there are bold traders, and there are old traders – but there are NO OLD BOLD TRADERS – so please use caution with your size as we could press a bit higher before a solid test of support.

The backdrop of global slowdown still prevails.

RECAP – $ES_F Buyers now stronger above 2826.75 but face resistance to 2873. Sellers want to move us below 2803 but are willing to wait it out and stage the fade near 2853.

Divergent action still sits below the movement of price on both sides of the trades – long and short – but traders are still looking at deep support edges to bounce. Lower highs and lower lows confirm to me that the overall pressure still looks negative but slipping neutral in the shorter duration as the counter trend bounce tries to hold a footing.

Twitter:  @AnneMarieTrades

The author trades stock market futures every day and may have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.