Today and tomorrow are probably the two most important days of the year for stocks as the Fed starts its two-day meeting on rates with an announcement coming tomorrow at 1:00 central. Big news that hit the market this morning is ECB’s Draghi was on tape saying if inflation does not tick up, the central bank will provide a new stimulus package which would include lowering rates or a new round of asset purchases. This statement provided a big jump in equities and now 17-year Bunds are negative. So, the big question now is what does the Fed do tomorrow? I don’t believe the Fed cuts rates, but most are thinking that Powell does state that the door is open for a cut in July. The markets are trading as if Powell will be true to his word, so the risk becomes high that Powell is not as dovish as the street thinks he will be. If he is not dovish tomorrow, expect the stock market to fall very hard. We will find out at 1:00 tomorrow so traders should be on guard.    

Technically, the market is getting near term overbought with resistance at today’s high, 2911.50.  On the down side, 2880-2872 is the first support with a break of that level could lead to a quick move to psychological support at 2850. No reports of significance today but we have already seen a big move on Draghi, so I would expect some back and fill in the S&P today as the day progresses.

E-Mini S&P 500 Jun ’19 Daily Chart