Jobs Day Arrives

Jobs day kicks off busy week.

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Our View

The ES has rallied to its highest level since March 2022, largely on hopes that the Fed is finally done with its non-stop interest-rate hikes. They have curbed their rate hikes over the last few months, instead opting to keep rates unchanged. Now the market is no longer pricing in any more rate hikes and instead, is currently favoring a rate cut in March.

Now that inflation has dropped, the bonds have rallied and there is a high level of anticipation ahead of today’s report. Analysts forecast that U.S. private non-farm job gains will come in at around 173,000 when the number is released at 8:30 ET.

Remember, next week is busy too.

We have the CPI data on Tuesday, the Fed on Wednesday and the triple-witch expiration on Friday.

Our Lean

I don’t know how the number is going to pan out, but if the ES gaps lower with Globex volume of 350k or more, I am a buyer.

If the ES gaps higher, I am a reluctant seller, but I want to remind everyone that the ES sold off from the open and went down all day after Wednesday’s open. The point being, sometimes — not all the time, but sometimes — it’s a “put in a stop and let it run” kind of day.

I am a buyer of weakness but want to see how the ES acts after the open. If we do start going up, I think there is a good short at 4620-4630 — 20 to 30 points above the big 4600 level.

For those of you who like HandelStats levels, here they are:

MiM and Daily Recap

The ES traded up to 4576.25 on Globex and opened Thursday’s regular session at 4576.50. After the open, the ES traded 4560.75 and then raced up to a 4579.25 double top at 9:39, and then begrudgingly sold off down to 4569.75 at 9:52. For the next 18 minutes, the ES back-and-filled in a 6-point range until 10:10 and then traded up to 4588.50 at 10:36. This is how it works when the S&P ‘back and fills’ — I am going to make a chart of exactly what I am talking about. It was this back-and-fill that led to the day session rally and it started on Globex.

ES 5-min recap with back-and-fill notes

From there, the ES dropped down to just below the VWAP down to 4571.75 at 11:20, ripped back up to 4586.75 at 11:41 and for the next 45 minutes back-and-filled in a 4- to 5-point range. Then the ES rallied up to a new high at 4596.00 at 2:23, sold off 10 points down to 4586.00 at 3:01 and traded back up to 4591.75 as the early imbalance showed $505 million to buy. It traded 4587.25 the 3:50 cash imbalance showed $326 million to buy, traded 4588.50 on the 4:00 cash close and settled at 4587.25 on the 5:00 futures close, up 33.50 points or 0.74% on the day.

In the end, this is going to be short and sweet — Wednesday’s weak close set up yesterday’s rally; that’s how it works, you can’t sell weak closes. In terms of the ES’s overall tone, it was firm. In terms of the ES’s overall trade, volume was not high but steady: 291k traded on Globex and 1.422 million traded on the day session for a total of 1.73 million contracts traded.