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Our View

Back when I had the trading desk business, I would visit Dubai for several weeks at a time. Despite having a small area for tech firms, they were light years behind us. After coming back, I would always say, “we live in a wonderland.”

Years later though, and cracks seem to be forming.

As much as I want to believe “this time is different” and fully embrace a new uptrend in the S&P, I just can’t do it. According to S&P Global Market Intelligence, there have been 183 bankruptcies in the first quarter of 2023 — more than any other Q1 since 2010 — while big US companies continue to downsize and cut costs.

I don’t think the banking crisis is over — the KRE ETF almost made new 52-week lows on Thursday — and the decline in commercial real estate is going to rip through every city, big and small. I tweeted a headline that said Xi had ordered every ship passing through the Taiwan Strait to be stopped.

Someone asked me why I didn’t think it was a good idea for the US to constantly pick a fight with China. It’s a simple answer: We will lose every ship and jet we fly into the South China Sea and put all our military personnel at risk.

I have said many times that a big event is coming this summer and all of the above reinforces it.

Our Lean

Despite the current realities (some of which are laid out above), the trend has been higher. I don’t how long that will last, but for now, they bulls are buying the dips.

Today is Jobs “Fry-day” and the futures index markets are only open until 9:15 CT. Goldman Sachs says that the recent spike in initial jobless claims is due to seasonal adjustments.

We’ll get a better picture of employment tomorrow morning. Strong results keep the Fed in a hawkish stance. Weak results are good for the Fed but bad for the economy. So bulls are hoping the report can thread the needle this morning. The ES will trade mostly on the jobs number before closing for the weekend. Monday will give us a better tell on direction.

The weather is warming up. Enjoy that long weekend and some extra time with friends and family!

Lastly, the NAAIM Exposure Index continues to climb. In other words, money managers continue to put money to work in equities:

MiM and Daily Recap

The ES traded down to 4105 on Globex and opened Thursday’s regular session at 4108 After the open, the ES dropped down to 4096.50 at 9:45, rallied back up to 4113 and had one last selloff down to a lower high at the 4101 level at 10:40. From there, it rallied up to 4135.25 at 2:15 and then sold off down to 4127.50 at 3:15.

The ES traded 4031.25 as the 3:50 cash imbalance showed $228 million to sell, traded up to 4133 and traded 4132 on the 4:00 cash close. It settled at 4130.75 on the 5:00 futures close, up 16.25 points or up 0.39% on the day.

Here’s a look at how some of this commentary plays out in the trading room:

In the end, the ES was a chop machine. In terms of the ES’s overall tone, when the Nasdaq futures were going down, so were the ES futures. When the NQ was going up, so was the ES! Tech steered the ship — again. In terms of the ES’s overall trade, ‘thin to win’ racked up only 1.26 million contracts traded.

Technical Edge —

Disclaimer: Charts and analysis are for discussion and education purposes only. I am not a financial advisor, do not give financial advice and am not recommending the buying or selling of any security.

Remember: Not all setups will trigger. Not all setups will be profitable. Not all setups should be taken. These are simply the setups that I have put together for years on my own and what I watch as part of my own “game plan” coming into each day. Good luck!