Powell Speech Looms Over Wall Street

This week opened with traders facing another level of stock market catalysts.

The looming catalyst is Federal Reserve (Fed) Chairman Jerome Powell set to speak at 2:30 p.m. Eastern on Wednesday. He is expected to confirm Fed plans to raise benchmark interest rates.

Often the market can digest uncertainty in the days leading up to a speech by Powell. This week anticipation of Powell brought volatility and choppiness to the market.

As the speech draws closer, it will be essential to note how big players on Wall Street position themselves ahead of the event.

Market respects line in sand

One significant level traders should target is the psychological level of 3,900 on the S&P 500 futures (/ES). 

This level marks a line in the sand for the market moving forward. Above 3,900, there can be some upside potential. Below 3,900, the market is vulnerable.  

The market took no time testing 3,900 once the cash session opened Monday. The market quickly rushed to the upside before ultimately stalling out at 3,900.

The market had tried its best, but could not overcome the resistance holding at 3,900.

This rejection is essential as, for now, the market has not been able to break through. 

Roadmap heading into Powell speech

Going back to 3,900 is just the starting point for a road map as traders navigate this week.

Other essential levels to the upside include: the 15-day simple moving average (SMA), the 21-day exponential moving average(EMA), and the point of control (POC) level.

The 15-day SMA is positioned at 3,973, the 21-day EMA at 4,006, and the POC  at 3,942. These are targets traders here at Simpler will be watching.

On the downside, a break back below 3,900 has psychological levels of 3,850 and 3,800 to watch.

These levels provide targets for both sides of the market. Remaining unbiased with a catalyst such as Powell speaking is important for traders working to stay on the right side of any big move.

Market closes with strength

Around mid-afternoon, the market found support at the volume-weighted average price. This support catapulted the market back to the high of the day at 3,900. This time the market had enough buying volume to push through the line in the sand. 

For the rest of the day, the market held the bullish sentiment staying about the 3,900 level. Staying above 3,900 for the rest of the session was noteworthy as the market found support at the previous level of resistance. 

Into the close, the market pushed higher with strength. The buying pressure picked up and held firmly through the closing bell.

Stock market closes positive

The Nasdaq and the S&P 500 were positive to close the session. The S&P 500 futures closed up .75%, gaining 29 points, while the Nasdaq futures closed up 0.84%, a gain of 98 points. The Dow followed, closing up 0.62%, adding 191 points.