Markets digest mixed signals as central banks hold the line

U.S. markets ended a volatile Wednesday lower, with the Dow down 0.38%, S&P 500 off 0.12%, and Nasdaq up 0.15%, after the Federal Reserve left rates unchanged in a split decision — two governors dissented, calling for an adjustment. Chair Jerome Powell cooled expectations for a September rate cut, noting the labor market remains solid and inflation is “somewhat elevated.”

Earlier optimism faded despite stronger‑than‑expected Q2 GDP growth of 3%, as underlying data suggested momentum could be slowing. Market odds of a September rate cut dropped below 50%, pressuring rate‑sensitive sectors.

Meanwhile, the Bank of Canada also held rates steady, echoing the Fed’s caution and signaling it needs more evidence of cooling inflation before easing. Global traders are now weighing synchronized central bank “pause mode” against signs of economic resilience.

Breadth was mixed: the S&P 500 logged 31 new 52‑week highs versus 15 new lows, while the Nasdaq posted 73 highs and 104 lows. Trading volumes were slightly below the 20‑day average, reflecting investor hesitation ahead of key earnings and further policy signals.

Market Structure Shifts (MSS) & Breaks of Structure (BOS) are clearly visible with higher lows forming after an aggressive stop run (liquidity sweep) near 6360 zone (NY6 purple candle).

Liquidity pools beneath intra-day lows were taken, leading to an aggressive displacement move upward — a hallmark ICT entry model setup.

Current PA shows continuation structure after an FVG fill near 6380 and reaccumulation just below the prior NY session high (E NY 5).

Entry still intact: Based on ICT’s optimal trade entry (OTE), price retraced into the 61.8–70.5% zone from the prior impulsive leg and is now in continuation phase.

Gann levels and square of nine perspective

Using Gann angles and time cycles:

• A strong Gann 1x1 angle (price-time balance) is emerging from the NY6 low, suggesting that time and price are in harmony and favoring further upside.

• The rally is also supported by a Gann retracement confluence at 6380 (50%) — key support held.

• Gann Time Cycle from July 25 suggests a bullish pivot window into July 31–August 2 — matching current momentum.

 Gann confirms bullish continuation toward 6475 as long as price holds above 6388 on a closing basis.

Minimal surface area and market compression geometry

• The recent sideways action post-spike is forming a low-volatility pocket which acts as a springboard.

• Market has transitioned from compression (low volatility) to expansion, confirming the impulsive wave structure.

This breakout resembles a compressed minimal surface volume burst, common before terminal rallies into higher time frame liquidity zones.

Sigma six quant signal (Statistical edge)

• Sigma 6 breakout from the low-volatility band indicates a rare tail event forming, confirming a high-probability move toward 6475.

• Based on Z-score deviation from mean reversion zone, price is now in a +2.5σ move, and statistical models suggest that 6475 = 3.2σ target.

 No reversion signal yet. Statistical bias supports continuation.

The S&P 500 cash index presents a compelling case for bullish continuation, supported by a rare confluence of signals across multiple frameworks. Smart money dynamics point to liquidity runs and confirmed displacement, while Gann’s price-time alignment strengthens the bullish narrative. As long as price holds above 6365, the path toward the 6475 target remains valid. A close below 6365, however, would nullify the bullish setup.