Friday's Market Minute: Post-Fed Markets Rally Into New All-Time Highs

Bulls may not have gotten the rate cuts for which they were hoping at this week’s FOMC meeting, but a more dovish-sounding Fed seems to have been good enough to propel the S&P futures to a new all-time intraday high of 2,964.50. The index futures finally snapped out of the relatively tight weeklong trading range of 2,880 to 2,900 on Tuesday after an upside breakout during the overnight session. It was also the overnight session after Jerome Powell’s comments on Wednesday that was responsible for the melt-up that finally cracked through long-term resistance levels dating back to September, 2018.

A sharp dip back into the resistance zone and the subsequent V-shaped recovery yesterday left markets green on the day, although technical analysts may have noted the divergence between the all-time highs in the ES price and an RSI reading that failed to exceed the previous highs from early May. On the other hand, the CME FedWatch Tool now lists a 100% probability of a rate cut by the July 31 FOMC meeting, which brings to mind one of the most basic trading adages; don’t fight the Fed.

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