The Federal Reserve Bank of Kansas City's annual Economic Policy Symposium will take place in Jackson Hole on Thursday evening. The following day, Fed Chair Jerome Powell is expected to unveil the regulator's new policy framework, aimed at achieving its inflation and employment targets.
Powell's speech may reflect how much support there is for a rate cut in September. Market opinions are currently divided on what monetary policy steps to expect from the Fed and when. With inflation remaining above the regulator’s target of 2% and signs of a slowdown in the US labor market, traders suggest different scenarios of the future monetary policy in the country. However, the Trump administration continues to encourage the Fed to reduce borrowing costs. Also, the issue of central bank independence is likely to be discussed on the sidelines of the conference.
At the start of the new trading week, futures on the S&P 500 (SPX) index rose slightly after a modest gap and then reversed downward, aiming to break through the nearest support at $6,445. There are two more support levels below this threshold—$6,430 and $6,410. Thus, if SPX drops below $6,445, its next target will be $6,430.
The overall recommendation is to sell SPX. Profits should be taken at the level of $6,430. Stop Loss could be set at $6,480.
The volume of the open position should be calculated so that the potential loss (protected by a Stop Loss order) does not exceed 1% of your deposit. If your account balance doesn’t allow opening a position of this size, it’s better to avoid entering the market on this signal and wait for other trade options that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
