Tax & Congress

Outlook: U.S. stock index futures pointed to a cautious, mixed open on Friday morning as traders grappled with concerns about the new tax proposals. Markets are focusing on the tax reform plans and what will happen to them when they enter Congress. The reform plans, which promise lower tax rates for corporations and individuals, could be watered down or fail to pass at all; the administration and the Republicans have struggled to pass major legislation this year.

/ES Value: YVAH 2507.50 YPOC 2506.50 YVAL 2503

Plan: Yesterday /ES market left a bullish bimodal profile (LIS 2504.75) Watching the big picture, market is balanced within 2485-2509 auction range, drawing a bimodal (LIS-CLVN 2497). Overnight is balanced moving within yesterday's value, so we've 2 options:

A) If market remains above LIS 2504.75 with cash volume rising, try to be a buyer leaning on 2504-2505 towards ATH 2509.25 and PBT 2511.50 Failure to take out ONH 2507.75 early is signal of weakness.

B) If market moves below LIS 2504.75 with cash volume falling, try to be a seller leaning on 2505-2504 towards LVN 2501.50 and CLVN 2497. Failure to breakdown ONL 2505.50 early is signal of a strength.

Tips: Normal Auction after a 'D' breakout, usually draw a bimodal 'B' first, to end at trimodal 'E'. Market got balance from last low 2485 towards 2509 so back to fill the holes, makes sense. On the bigger picture (composite) that range shows a bimodal with CLVN 2497 as line in the sand. So, market could test 2497 again, to fill and confirm balance or reject before drawing a trimodal 'E'.

Today's Economic Calendar

08:30 AM Personal Income/Outlays
09:45 AM Chicago PMI
10:00 AM Consumer Sentiment
09:45 AM FOMC Member Harker
01:00 PM Baker-Hughes Rig Count

Link for Updates

Disclaimer: All information on this outlook is for educational purposes only and is not intended to provide financial advice.

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