Market Technicals Ahead Of Powell Testimony

Good Wednesday Morning, MPTraders!  March 6, 2024-- Pre-Market Update: For all intents and purposes, it is a Fed Day. Fed Chair Powell goes to Capitol Hill (10 AM ET) for several hours of grilling by members of the House Financial Services Committee today, which probably will turn into a politically charged circus considering that all of the committee members will be up for reelection in November... 

Be that as it may, Chairman Powell's every word will be scrutinized by Fed-Watchers, analysts, investors, traders, and algorithmic programs. After all is said and done later this AM, if everyone concerned concludes that Powell stayed the course and did not deviate from the Fed's data dependency mantra, and Powell's desire to maintain a relatively restrictive Fed funds rate (5.38%), then my sense is that key support levels approached by not violated yesterday at 5045-5065 in ES (see my attached 4-Hour Chart) and at 503.50 to 504.50 in SPY (see attached chart #2), then the equity indices should sigh in relief and head higher to retest the recent ATH-zones at 5135/45 in ES and at 512 to 514 in SPY.

Conversely, any deviation in expectations about when the first rate cut could occur will move markets-- up if sooner than expectations, and down if later than expectations, which of course, will lead some pundits to conclude that Powell "knows something about Friday's Jobs Report."... Last is ES is 5111.5... Last in SPY is 509.75...

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