Trade Plan for 9/19-9/23

A September Fed Meeting to Remember

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Last week I was most confident in metals being bullish for the week again, but unfortunately gold and the gold miners could not hold early gains when the market declined.  Most interesting was that silver overcame the weakness all around it and closed green.  Now we shall see if silver was just making up for past weakness or whether we’re starting to see a shift in trend.

This week we have the much anticipated September FOMC meeting with an interest rate decision on Wednesday.  We expect that the resulting market action will be more about whether a dovish pivot for future rate rises occurs rather than the rate increase itself.  We will play the market action from my pivots to reflect that, since the indices closed last week with daily hammer candles within the context of bearish engulfing weekly candles.   

This week @SLMacro talks about credit default swaps and how analyzing them can be used as a tool to look at rising fear, or lack of, in the fixed income market.

Summary of Market Action Last Week:

• $ES/S&P 500 Futures and $NQ/Nasdaq futures reversed gains from the previous week closing the week with bearish engulfing candles.  $RTY/Small caps futures was the only one of the three to hold a higher low and declined the least, although not by much. 

• $GDX (gold miners) declined in step with the market, but bounced from support. $GC/gold futures, which had previously held a higher low, gave it up last week.  $SI/silver futures showed impressive strength again this week.  

• $CL/Crude Oil futures chopped within the recent range and settled under support.  $XOP/oil equities declined proportionally to the market just like gold miners.

Here’s how the week closed out:

For the week ahead (9/19-9/23/22)