Weekly Wisdom: Interest Rates & Dollar Soar Higher

Greetings fellow traders and welcome to your September 28th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

Now let’s get to what we’re currently seeing in these crazy markets and what we have our focus on going forward.

Taking a look back on this week, September 25 – 29:

• Equities continued to sell off this week following last week’s hawkish message from Powell and the Fed despite the pause on the rate hike. $SPX futures sold off below last week’s low all the way down to 4277 before finally finding a bounce on Wednesday.  
• Tuesday’s S&P Case-Shiller home price index y/y update came in at 0.1% vs 0.0% expected. The Richmond Fed manufacturing index was a beat at 5 vs -6 expected. Conference Board consumer confidence was a miss at 103 vs 105.5 expected and new home sales also missed at 675,000 vs 699,000 expected.  
• Wednesday’s durable goods orders update was a beat at 0.2% vs -0.5% expected, with core durable goods orders also beating at 0.4% vs 0.2% expected.  
• Thursday’s weekly unemployment claims were a beat at 204,000 vs 214,000 expected, while the final Q2 GDP revision was a miss at 2.1% vs 2.2% expected and final GDP price index q/q was a miss at 1.7% vs 2.0% expected.  
• Friday, September 29 brings us updates for the CPE price index m/m, core PCE price index m/m, personal income m/m, personal spending m/m, goods trade balance, and preliminary wholesale inventories m/m all at 8:30 a.m. ET.  This is followed by Chicago PMI at 9:45 a.m. ET, then the University of Michigan’s consumer sentiment and inflation expectations index at 10:00 a.m. ET.

Here’s what we are eyeing next week, October 2 – 6:

Level Highlights:

• $SPX futures continued selling off further this week after breaking the 4350 pivot early on and trading down to 4277 before finding a bottom during Wednesday’s trading session. That was a bit above the 200SMA mentioned last week which is up to 4232 now. Bulls found some help with a $VIX turn lower on Wednesday followed by a much needed turn lower in both the DXY Dollar index and interest rates. Bulls still have a lot of work to do going forward in order to look better, starting with a close back over the 4350 pivot. After that, 4380-4400 is resistance above, followed by 4450. Shorts may start to get squeezed and lose momentum should we see a close back over 4400. 
• $VIX traded lower on Wednesday which helped give bulls a bottom to play off of, but not before rising further after last week and getting up to 19.71 just shy of the 20 resistance level from last Spring, trading at levels not seen since May. Wednesday’s $VIX session saw the highs near 20 but ended up rolling over and closing down near 18, sinking further on Thursday down toward 17. This, along with the current top out in interest rates and the Dollar index, helped give equities their first real bid in weeks. Bulls will now look for a $VIX bleed back down to 14, while bears will look for 16 to hold as support for the $VIX going forward.

Upcoming News:

• Monday, October 2 starts the week off with final manufacturing PMI at 9:45 a.m. ET, followed by ISM manufacturing PMI, ISM manufacturing prices, and construction spending m/m at 10:00 a.m. ET.
• Tuesday, October 3 brings us JOLTS job openings at 10:00 a.m. ET.  
• Wednesday, October 4 kicks off with ADP non-farm employment change at 8:15 a.m. ET. This is followed by final services PMI at 9:45 a.m. ET, then ISM services PMI and factory orders m/m at 10:00 a.m. ET.  
• Thursday, October 5 we’ll get weekly unemployment claims and the trade balance at 8:30 a.m. ET
• Friday, October 6 ends the week with the jobs report which includes average hourly earnings m/m, non-farm employment change, and the unemployment rate at 8:30 a.m. ET. We’ll also get the update for consumer credit m/m at 3:00 p.m. ET.

Here’s Your Chart of the Week:

Via CNN Business: The CNN Fear/Greed Sentiment Index is back to being in the fear territory after spending the majority of the month of July in the Extreme Greed area. This is good news for bulls who are looking for bigger picture long opportunities as sentiment gets washed out with the rise in the DXY and Interest Rates.

Source

SPY Daily Update:

$SPY daily chart found support at 422 in some extreme downside extension on Wednesday afternoon. We are now seeing a strong bounce back up toward 430, with 432 and 435 as potential resistance levels ahead on further bounces. 

SPY Weekly Update:

$SPY weekly chart continued selling after last week’s big break of the inside weekly candle. Bulls are staging a decent bounce now, but keep in mind we are now in a technical downtrend on the weekly chart with the lower high and lower low – this won’t be resolved until $SPY gets back above 445 or in time we make a higher low and then higher high on this weekly chart.

Want to get this newsletter by email? Subscribe here.

Want to Trade With My Team? Click here!

T3 Live’s James Young joins our next free pro trader Q&A on October 11. Register now on LinkedIn!

-Patrick Hawe

Disclosures

Patrick Hawe’s current positions:

*As of 1:42pm ET September 28, 2023

Patrick Hawe is an Associated Member of T3 Trading Group, LLC (“T3TG”), a SEC Registered Broker-Dealer & Member of FINRA/SIPC. All trades made are placed through T3TG.

T3 Live, LLC is a financial publisher that disseminates information about economic, business, and capital markets issues through various media. T3 Live is not a Broker-Dealer, an Investment Adviser, or any other type of business subject to regulation by the SEC, CFTC, state securities regulators or any “self-regulatory organization” (such as FINRA). Although T3 Live and T3TG are affiliated companies by virtue of common ownership, the companies are managed separately and engage in different businesses.

The programs that T3TG distributes (including articles, commentary, videos, blogs and social media postings) are for informational and educational purposes only. No one should consider the information disseminated by T3TG to be personalized investment advice, a recommendation to buy, sell or hold any investment, an offer (or a solicitation of an offer) to buy or sell any investment, or the provision of any other kind of investment advice. No one associated with T3TG is authorized to make any representation to the contrary.

T3TG provides information that viewers of its programs may consider in making their own investment decisions. However, any viewer will be responsible for considering such information carefully and evaluating how it might relate to that viewer’s own decision to buy, sell or hold any investment. Such decisions must be based on that viewer’s individual and independent evaluation of his or her financial circumstances, investment objectives, risk tolerance, liquidity needs, family commitments and other factors, not in reliance on any information obtained from T3TG.

Statements by any person (whether identified as associated with T3 Live, T3 Trading Group, or any other entity) represent the opinions of that person only and do not necessarily reflect the opinions of T3TG or any other person associated with T3TG.

It is possible that any individual providing information or expressing an opinion on any T3TG program may hold an investment position (or may be contemplating holding an investment position) that is inconsistent with the information provided or the opinion being expressed. This may reflect the financial or other circumstances of the individual or it may reflect some other consideration. Viewers of T3TG programs should take this into account when evaluating the information provided or the opinion being expressed.

Although T3TG strives to provide accurate and reliable information from sources that it believes to be reliable, T3TG makes no guarantees as to the accuracy, completeness, timeliness, or correctness of any such information. T3TG makes no guarantee or promise of any kind, express or implied, that anyone will profit from or avoid losses from using information disseminated through T3TG.

All investments are subject to risk of loss, which you should consider in making any investment decisions. Viewers of T3TG programs should consult with their financial advisors, attorneys, accountants or other qualified professionals prior to making any investment decision.

The risk of loss in trading equities, options, forex and/or futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage that is often obtainable in options trading may benefit you as well as conversely lead to large losses beyond your initial investment. Past results are not indicative of future results. No representation is being made that any account will or is likely to achieve profits similar to those shown.

T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of FINRA/SIPC. All trading conducted by contributors associated with T3TG on the Virtual Trading Floor is done through T3TG. For more information on T3 Trading Group, LLC please visit www.T3Trading.com.