FOR MONDAY: (7/30) The Monday before FOMC is often a cycle low for stocks and then they short-cover to be flat or long into the announcement. While we expect a bearish reaction to FOMC on Wednesday, we’re not likely to be able to handle the huge bounces that often happen around FOMC and will have to stay short. We completed most of our Aug. and Sept. research and it is included below. Hard to see time and patterns that will allow a new high on the S & P until we get through Sept. seasonal lows.
SEPT. E-MINI S & P 500
S & P ANALYSIS FOR MONDAY: (7/30) Our shorts did well and we always advocate multiple positions so you can keep something on in case of a meltdown. Resistance at 2822 ad 2825.50 and support at 2800. Major support at 2794 and 2786. Markets congest more often than not before FOMC so the worst may be over by Sunday or Monday and then short-covering on Tuesday. The reaction on Wednesday looks negative.
CYCLE SYNTHESIS: Lower Sunday; bottoming Monday; short-covering Tuesday; lower into Wednesday; short-covering Thursday; volatile Friday.
