Volatility Playbook: Equity Futures Rebound as Housing Data Loom – August 18 Trading Blueprint

Market Overview & Sentiment News

• Equity futures steady amid housing data and Fed chatter: U.S. futures are hovering near record levels but off overnight lows as traders await the 10:00 ET NAHB Housing Market Index and comments from Fed Governor Michelle Bowman later today. Market expectations for a September rate cut remain around 95%, but investors are cautious ahead of next week’s Jackson Hole symposium and retail earnings reports.
• Global markets mixed: European indices are steady near multiweek highs, buoyed by signs of resilient corporate earnings and softening inflation. Asian markets were mixed, with China’s Shanghai Composite flat and Japan’s Nikkei edging lower as traders digested lackluster trade data and the prospect of more stimulus measures.
• Credit markets calm with pockets of concern: U.S. corporate credit spreads remain tight, reflecting diminishing recession risks and decent earnings. However, analysts warn that the Federal Reserve may see loosened financial conditions as a reason to delay aggressive rate cuts, and select pockets of high‑yield debt continue to show stress.
• Oil attempts to rebound: Crude prices have regained some ground after last week’s selloff, trading back above $82 per barrel as traders anticipate the American Petroleum Institute’s inventory report. The International Energy Agency still projects supply growth to outpace demand in the second half of 2025, tempering bullish enthusiasm.
• Fed and geopolitical watch: Attention will shift to remarks from Fed officials and upcoming U.S.–Russia diplomatic efforts related to energy sanctions. Markets are also preparing for next week’s FOMC minutes and Fed Chair Jerome Powell’s speech at Jackson Hole, which could shape expectations for policy easing.
• Other headlines: Retailers such as Home Depot and Lowe’s kick off a big week of earnings, offering insights into consumer resilience; global investors remain focused on U.S. tariff negotiations and the evolving Ukraine ceasefire talks.

Economic Calendar Analysis & Trading Plan

Today’s calendar features a handful of medium‑impact events. Traders will monitor housing data, Fed commentary and energy inventories for clues on the economic outlook and trading opportunities.

• 10:00 ET – NAHB Housing Market Index (AUG): This index measures homebuilder sentiment. A stronger‑than‑expected print (>34) could bolster risk appetite and lift homebuilder and housing‑related stocks; a miss could pressure yields and risk assets. Consider buying dips into VWAP on S&P and Nasdaq futures if the headline surprises to the upside; fade rallies back to VWAP if sentiment sours.
• Events later this week: Tuesday brings July housing starts and building permits data, while Thursday’s Philadelphia Fed manufacturing survey and jobless claims will offer clues on growth. The week culminates with Fed minutes and Chair Powell’s Jackson Hole address, which could cause significant volatility across asset classes.

Foundational Analysis

• Cooling inflation and rate‑cut expectations: Recent CPI and PPI data show inflation trending toward the Fed’s 2% target, reinforcing market expectations for a rate cut as early as September. This supports elevated valuations for growth stocks and underpins equity futures.
• Housing sector in focus: The NAHB Housing Market Index will offer insight into the resilience of the U.S. housing market as higher mortgage rates weigh on affordability. A stable reading may support consumer confidence, while weakness could signal headwinds for growth.
• Credit markets flush with liquidity: Tight corporate credit spreads and a rejuvenated loan market reflect investors’ appetite for risk and the availability of capital. However, some strategists warn that such loose financial conditions may lessen the urgency for aggressive Fed easing.
• Oil supply still in surplus: The IEA projects supply growth to exceed demand through year‑end. Even with geopolitical tensions and sanctions risks, inventory builds and high output should cap rallies in crude, maintaining a bearish bias on energy futures.
• Tech leadership and earnings: Mega‑cap technology stocks continue to drive market gains, though valuations are lofty. Earnings from major retailers this week will shed light on consumer strength and may confirm whether the economy can withstand higher rates.
• Global demand resilience: While some Asian export data softened, overall global demand appears resilient, supporting industrial and commodity‑linked futures. The Chinese government’s incremental stimulus measures are also being watched for their impact on resource demand.

Technical Analysis

• ES (S&P 500 futures): Overnight, ES slid sharply below its session VWAP around 6,450 and tested support near 6,400 before bouncing. It remains below the VWAP and near the lower band of its opening range. Look to buy a reclaim of 6,450–6,460 on increased volume, or short rallies into the VWAP if price stalls; key support sits at 6,390 with resistance at 6,470–6,490.
• YM (Dow futures): Dow futures dropped to around 44,500 overnight and have since rebounded but remain below the session VWAP (~44,800). Long setups may emerge on dips to 44,500–44,600 if price holds; watch for reclaims of 44,800 to open the door to 45,000. Use stops under 44,400.
• NQ (Nasdaq 100 futures): Nasdaq futures dipped to about 22,740 and recovered toward 22,900 but remain below the VWAP near 22,960. Use retests of 22,800–22,850 for long entries with stops below 22,700; target 23,000–23,050. Alternatively, short rallies into 22,950 if momentum fades.
• RTY (Russell 2000 futures): Russell 2000 futures slid to 2,270, bounced to 2,280, and are consolidating below VWAP (~2,285). Maintain a cautious long bias; buy dips near 2,265–2,270 targeting 2,285–2,295 with stops under 2,255.
• GC (Gold futures): Gold continues to hold above its VWAP near 3,350 after a mild pullback. Use pullbacks to 3,345–3,350 for long entries, targeting 3,365–3,375 with stops below 3,335. Gold remains a hedge amid Fed uncertainty.
• CL (Crude oil futures): Crude oil futures rallied back above their session VWAP (~82.20) after hitting an overnight low near 81.20. With supply still ample, look to short rallies toward 82.80–83.30 with stops above 83.60; support lies at 81.00–81.50.
• Overall themes: Indices remain below VWAP after an overnight sell‑off but are stabilizing; wait for VWAP reclaims or fade rallies. Gold holds firm as a hedge, while crude’s bounce may be short‑lived amid persistent oversupply.

Todays Strategy for Scalpers & What to Watch For

• Housing sentiment scalp: Trade the 10:00 ET NAHB Housing Market Index by scalping around VWAP. A strong print could trigger a rally in risk‑on assets; fade any overextension back to pre‑release levels if sentiment falters.
• Follow global momentum: European and Asian sessions provide context for early moves. Look for confirmed breakouts on volume, especially in industrial and commodity futures.
• AI and tech: Monitor consolidation patterns in AI leaders like Nvidia. Use VWAP retests for precision entries, keeping size small due to elevated valuations.
• Hedging plays: With yields fluctuating around speeches and upcoming data, hedge long tech exposure with short positions in bond‑sensitive futures.
• Use a Virtual Private Server: With QuantVPS, execute trades with sub‑1 ms latency.

What Could Happen After Market Open

• Housing data reaction: The NAHB Housing Market Index could generate an initial surge or fade in equities; watch the S&P VWAP for support or resistance as traders react to the headline.
• Industrial follow‑through: Global momentum could drive follow‑through buying in industrial and commodity‑linked futures if data and earnings support the narrative.
• Late‑session dynamics: With few scheduled events after the API data, watch yield pivots and sector rotations for additional opportunities, especially if market internals diverge.

Summary

Equity futures have pulled back from record highs but remain within striking distance as traders look to today’s NAHB housing data for direction. Cooling inflation and expectations of a September rate cut underpin risk appetite, while calm credit markets provide liquidity. However, resilience in housing, retailer earnings and the tone of Fed officials could sway sentiment. Oil has bounced but oversupply persists, and gold remains a steady hedge. For today, focus on fade‑and‑retest setups around the housing data while maintaining a bullish bias toward equities and a cautious stance on crude. Stay nimble and manage risk as the day unfolds.