The Fed has created the illusion of functioning markets, but today futures traders are striking back. The Fed, with all its trillions, may not have the control that it wants, and Wall Street wishes. Today looks pivotal in that regard.

The futures have been trading in a between 2808 and 2875 overnight and in the pre market, down 58 at 282814 at 8:00 AM in New York.

This is exactly on the trendline of the uptrend channel from the March low. Two previous tests of this trendline have held and generated rallies. Will the third time be the charm for bears?

Friday’s rally high, and last night’s high were right at important resistance levels. It’s been all downhill since. If the trendline around 2815 doesn’t hold there may be a second trendline around 2780 that will act as support. It that were to fail, then we’d be looking at 2705 for the next target.

Rate of Change and MACD tuned to an 8 week cycle are looking a little toppy. Sell signals are typically on the first hard down day. This decline would need to go further for them to trigger today. If the indicators hold and the ES stays above 2810, then the uptrend would still be intact.

If this is still a bear market, we’re getting to the point that that needs to be proven by a real downturn.The benefit of the doubt still goes to the bools here. But the bears at least seem to have a shot here. 

Again, this is for the perspective of one day only. The purpose of these reports is not to divine the longer term. 

Hourly ES S&P 500 Futures Chart

This chart is a mess, but one thing is clear. If it doesn’t bounce from the 2810 area, then the next stop would be 2800. And if that failed, then 2787. And if that failed, then 2750.

If 2810 holds, then we’d look for resistance at 2830 and then 2845.

There’s no 5 day cycle projection but just a little more weakness here would set it at 2765 initially.

Hourly indicators tuned to a 5 day cycle frequency are still bearish as of 8:15 AM. They are not oversold. But the key is whether support at 2810 continues to hold or not. If not, the gates of hell should open. If it holds, the question of who’s in charge would remain open until either 2810 breaks, or they get back above 2845-50.

Reminder- I’m only talking patterns for a day here. This is not the big picture. 

S&P Cash Index Hourly Chart 

The red bar at the far right shows where the futures traded overnight. It’s between 2808 and 2875. Resistance at 2875 held. Trend support was at 2835. So far, it looks like a goner this morning. However, if they rebound above that in the first hour, the bulls will be firmly in charge.

If they don’t, then the next level to watch will be 2760. That’s approximately where the trendline from the March low comes in. If that breaks, look out below. The next support levle would be 2720.