Our View
Like I said, short weeks can be tough. If you did not buy the pullbacks the last few days you are probably hurting a bit.
It can be really hard to play two-way flow. No one can pivot on a dime and go from short to long and then back to short without catching any heat. Mentally, that’s pretty draining in the first place. Second, it’s just not possible to do with 100% accuracy. Believe me — I’ve been doing this for more than 40 years.
While I can’t catch every rip and dip, I do try to provide some insight into the intermediate trends. What I try to do with The Opening Print is provide a look into how the market is behaving and give you all a “leg up” on the day; I try to provide the flow, which comes from my days on the floor.
For instance, all week we have been saying to buy the dip — and that’s coming from someone who keeps saying we can make new lows (the bigger picture)!
Now it’s jobs Friday and a good time to figure out if the bulls can continue to drive the market higher.
Our Lean
The ES opened right near the 3865 level we were watching yesterday, then exploded up and through 3875… so much for just giving longs 10 points! If you follow the technical section below, maybe you were able to ride the ES up to 3900.
Mr Top Step has a trading rule that says to fade the jobs gap if it sells off after the number. Either way though, until the pattern shifts, the lean is simple: Buy the weakness.
Daily Recap
The ES opened the regular session at 3866.75 and rallied right out of the gate, climbing up to 3891.75 at 9:50. It pulled back down to 3976.25 at 10:09, traded up to 3896.25 at 11:09, and then pulled back to 3885.50 and rallied up to 3900.00 at 12:37.
After the high, the ES traded back down to 3889.25 at 1:30 and then up to 3905.75 at 2:34. It pulled back down to 3899 and then traded up to 3914.25 at 3:22 — the session high.
The ES gradually pulled back down to the 3901.50 level at 3:49, traded 3905.50 on the 3:50 cash imbalance as it showed $1.2 billion to buy, and traded 3907 on the 4:00 cash close. The ES settled at 3899.25 on the 5:00 cash close, up ~57 points or 1.5% on the day.
In the end, it was a trend day up and any sale was wrong. In terms of the ES’s overall tone, it was firm all day until the MIM let down. In terms of the day’s overall trade, volume was low at 1.27 million contracts traded.
- Daily Range: 81.75 points
- H: 3914.25
- L: 3832.50
Technical Edge
- NYSE Breadth: 89.8% Upside Volume (!)
- NASDAQ Breadth: 83% Upside Volume (!)
- VIX: ~$26.00
We were oh-so-close to a 90%+ upside on the NYSE yesterday, but lacked the end-of-day momentum to get us there, unfortunately.
Today’s big focus will be how we react to the jobs report. The semiconductor stocks are acting well and if the S&P fetches a bid, there are some clear upside levels to focus on.
Game Plan: S&P 500 (ES & SPY), Nasdaq (NQ & QQQ), ARKK, META, AR
S&P 500 — ES
Given that the ES will trade on the jobs report for about an hour before the regular US open at 9:30 ET always makes jobs day tricky. In any regard, if the ES can go daily-up over ~3914, it opens up some very clear levels on the upside.
They include: 3920, last week’s high at 3950, the 50-day moving average near 3970 to 3975, and finally, the 61.8% at 3987.
On the downside, bulls would love to see the ES hold the 10-day and 21-day moving averages, and yesterday’s low at 3832.50.
As for picking a direction, I wish I could. But on a jobs day, we just have to react to the levels and breadth. Predictions (like betting short and watching it rip or vice versa) are what get traders into trouble.
S&P 500 — SPY (Daily and Weekly)
As for the SPY, same thing. I want to see it hold yesterday’s low and the 10-day and 21-day moving averages.
It would not be uncharacteristic to see another lower high at this point, but for the bulls’ sake, it would be nice to see some more reprieve here before an eventual dip.
On the upside, keep an eye on yesterday’s high near $390. Above it could give us last week’s high near $393. Above that is the 50-day, then the gap-fill near $401.
Nasdaq — NQ
Keep an eye on the Nasdaq, which was a leader yesterday. Daily-up over 12,168 could give us a tag of the 12,200 to 12,260 area, which is where we find the 50-day moving average, 61.8% retracement and last week’s high.
That’s a key area to me.
Nasdaq — QQQ
“Let’s see if this can drift up to the $295 to $297 area.”
And drift we did. Now sitting at the 50-day and 10-week moving averages, as well as last week’s high, the reaction to the jobs report is what could either cement this area as resistance or ignite the QQQ higher.
If higher, $305 to $310 could be in play.
ARKK
Daily on the left, weekly on the right.
If ARKK closes above $46, we could have something here. For two months now, this level has been resistance, but a close above it could unlock more upside potential, perhaps up to the $50 to $52 area.
Keep in mind, ARKK could rally all the way to $65 and not even retrace one-quarter of its losses. Back below $46 and I’m not interested in this name.
Today will be a big tell on how it trades going forward. Keep in mind, ARKK did not make a new low last month, while the S&P and Nasdaq did.
AR
We have been paid quite well on the long side with AR, but if it opens above Thursday’s high and fails to hold it, we could be looking at a potential short setup — especially if it loses the 10-day.
If that’s the case, we could be looking at $30 on the downside, then $27.50.
Otherwise, above $32.75 with strength could send this to $36.
META
Given the potential binary nature of today’s jobs action, I almost hate even putting this here. But I think it’s worth pointing out the $172.50 area on META.
This has been resistance for almost a month. If it can clear this level, the gap-fill near $175 is in play, followed by a potential push into the low-$180s.
Below $165 and $155 could be back in play.
Go-To Watchlist — Individual Stocks
*Feel free to build your own trades off these relative strength leaders*
- Numbered are the ones I’m watching most closely.
- Bold are the trades with recent updates.
- Italics show means the trade is closed.
Trade Sheets:
- MCK — We have hit two trim zones so far on MCK. Feel free to cash the last ⅓ of the position as you see fit. $335 to $340 is a potential upside target if it continues higher. Moving stop-loss up to $315
- DG — We got our second price target at $256 → That leaves us with one tranche left and looking for $260 to $262 with it. Break-even stop.
- MRK — Hit Targets 1 & 2 → Now out of ½
- $90 to $91 Stop Loss (or B/E).
- Looking for $95+ for ¼, then not sure. Maybe hold the last ¼ for a push to $100 if we don’t get stopped out.
- GOOGL — Booyah! GOOGL gave us our target at $2,375 and is now into a resistance area. I am out ⅔ here and may fish for a push to the $2,450 to $2,500.
- B/E Stop
- AAPL — I am out of 80% of my AAPL position as it hit our second target in the $145 to $146 area. It was specified that this was a lotto setup. Now just a runner left. We don’t let that go against us now!
Relative strength leaders (List is cleaned up and shorter!) →
- DLTR
- MRK
- ABBV
- UNH
- JNJ
- XLE
- CLR
- VRTX
- DG
- IBM
- MCK
Economic Calendar
As we all know, there’s no crystal ball when it comes to trading stocks, options, or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk-free for 30 days.
As we all know, there’s no crystal ball when it comes to trading stocks, options, or futures. But the Market Imbalance Meter may be as close as it comes. Knowing how the “Big Money” is placing its bets can give our trading room a big wave to ride — or a warning sign to stay out of the water. Come check it out now, risk-free for 30 days.
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