Weekly Wisdom: Traders Await PCE Data

Greetings fellow traders and welcome to your June 27th edition of Weekly Wisdom: Levels to Know and Moves to Look For!

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

Taking a look back on this week, June 24 – June 28:

• Markets have been very tight and choppy this week ahead of some important data coming later this week, including the latest PCE update on Friday morning, a number that the Fed watches closely.  
• $SPX futures have traded in a tight range between 5510 and 5560 throughout the week, failing to break either up or down, with a few false tails in the mix.  
• Markets saw some rotation take place during the Monday trading session, with $NVDA and the $QQQ trading lower while the $IWM traded higher.
• However, this rotation only lasted a day, with the rest of the week seeing mostly sideways chop and no real follow through to the upside for the $IWM.
• Data for the week began on Tuesday with a slight beat for CB consumer confidence coming in at 100.4 vs 100.0 expectations. The Richmond Manufacturing Index was a miss at -10 vs -3 expected.  
• Wednesday brought us data for new home sales which was a miss at 619,000 vs 636,000 expected.  
• Thursday brought a lot of data in the morning, beginning with an in-line final GDP q/q number of 1.4%, meeting expectations. Weekly unemployment claims were also fairly in-line at 233,000 vs 236,000 expected. Durable goods orders were a beat at 0.1% vs -0.5% expected. Core durable goods orders were a slight miss at -0.1% vs 0.2% expected. Final GDP price index q/q was a slight beat at 3.1% vs 3.0% expected. The goods trades balance was a miss at -100.6 billion vs -96 billion expected. Prelim wholesale inventories m/m was also a miss at 0.6% vs 0.1% expected. Later in the morning, we saw data for pending home sales which was a solid miss at -2.1% vs 0.6% expected.  
• Friday, June 28 ends the week with another important metric watched by the Fed with PCE, core PCE price index, personal spending m/m, and personal income m/m all at 8:30 a.m. ET. These are followed by Chicago PMI at 9:45 a.m. ET, and then revised University of Michigan consumer sentiment and inflation expectations at 10:00 a.m. ET. The Fed Monetary Policy Report is also set to be released at 11:00 a.m. ET. 

Here’s what we are eyeing next week, July 1 – July 5:

Level Highlights:

• $SPX futures continue to stay stuck in a tight range throughout the entire week, trading back and forth between 5510 and 5560.  
• Despite the multiple data points that were released Thursday morning, markets have been unable to break higher or lower, with a low of 5516 and a high of 5555 on Thursday’s trading session.
• The last day of the week brings multiple catalysts that could either push the market through these points, or at the very least loosen markets up for next week.
• The main catalyst in data terms is PCE on Friday morning before the market opens, which the Fed pays close attention to.
• Friday also marks the end of the month and the end of Q2, which is often met with rebalancing flows in both equities and bonds, another catalyst that could trigger a break of the market’s range.  
• One way or the other, $SPX futures should be able to break the range either Friday or at some point next week after the Q2 and month end rebalances are complete and new month/quarter flows come into play next week.  
• Next week is also a short holiday week, which often means markets are thinner and move more easily.  
• 5510 and 5560 are the break levels to pay attention to for week end/next week for $SPX futures.  

Upcoming News:

• Monday, July 1 starts the week off with final manufacturing PMI at 9:45 a.m. ET. This is followed by ISM manufacturing PMI, ISM manufacturing prices, and construction spending m/m at 10:00 a.m. ET.  
• Tuesday, July 2 kicks off with a speech from Fed Chair Powell at 9:30 a.m. ET. We’ll then see the latest update for JOLTS job openings at 10:00 a.m. ET.  
• Wednesday, July 3 is a half day for the equities market, with markets closing at 1:00 p.m. ET. Data for the day begins with challenger job cuts y/y at 7:30 a.m. ET. We’ll then see ADP non-farm employment change at 8:15 a.m. ET. This is followed by weekly unemployment claims, which will be released on Wednesday with the Thursday holiday, as well as trade balance data at 8:30 a.m. ET. These are 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. Although markets close at 1:00 p.m. ET, we’ll still get FOMC meeting minutes after the close at 2:00 p.m. ET.  
• Thursday, July 4 markets are closed for the July 4th holiday.  
• Friday, July 5 ends the week with average hourly earnings m/m, non-farm employment change, and the unemployment rate at 8:30 a.m. ET. We’ll also see the Fed Monetary Policy Report at 11:00 a.m. ET.  

Here’s Your Chart of the Week:

Via Refinitiv, SG Cross Asset Research/Equity Strategy:  As most know by now, the $SPX has had a wonderful year so far but is being led by the top 5-7 names in the index including $NVDA. The $IWM has been struggling to break out higher for over a year now, showing us the market’s strength consists of narrow breadth.  

Source

SPY Daily Update:

$SPY daily chart continues to chop sideways throughout the week, roughly between 542.50 support and 547 resistance – we may be stuck in this range until next week when markets should loosen up after the month/quarter end. Bulls remain in an uptrend and in control for now.

SPY Weekly Update:

$SPY weekly chart is giving an inside weekly candle with the tight, sideways range trading this week. Overall, this is a bullish rest candle, and bulls should look for the break over 547 at some point either Friday or next week. 540 and 537 are some support areas below should we end of breaking down lower.

Want to get this newsletter by email? Subscribe here.

Want to Trade With My Team? Click here!

-Patrick Hawe

Disclosures

Patrick Hawe’s current positions:

*As of 2:39pm ET June 27, 2024

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.