No miracle
Awaited like the Messiah, Kevin Warsh didn’t deliver one. As expected, the Fed’s benchmark rate stayed unchanged, the tone from FOMC members hardened, and the hawkish scenario came into sharper focus.
Anyone hoping for a message of reassurance from the new Fed chair walked out of the press conference with their tail between their legs. The Dow Jones pulled back not long after, even with Trump signing the peace deal at Versailles.
It has to be said: killing off forward guidance, gutting the monetary policy statement, and Warsh’s refusal to share his personal projections leave a bitter aftertaste. Is the situation so tense that the dust now has to be swept under the rug?
My trading plan
Once again, Dow Jones futures are trying to start the week on the right foot, but this time the energy isn’t offensive, it’s defensive.
The uptrend was already showing signs of weakness in recent weeks, first missing the monthly Resistance 1 by a hair [1], then narrowly failing to clear the symbolic 52,750 level [2].
This morning, buyers are trying to defend the upper edge of the June 15 bullish gap [3], hoping to print new highs. But a break of this key level could trigger a fast deterioration.
Given that backdrop, I’m sticking with short trades.
Happy trading!
Maxime holds two master’s degrees from the SKEMA Business School and FFBC. As founder and editor-in-chief of NewTrading.fr, he writes daily about financial trading.
Counting chickens
Cliff dive
Floating Free