Jobs Fry-Day Is Here
Expect more volatility
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Our View
Welcome to jobs FRY-day and October’s Week One FRY-day options expiration. A lot can happen between the two.
Like it or not, the ES is trying to go higher despite the continued weakness in the bond market. While rising rates have slowed the pace of hiring, unemployment remains near a half-century low.
Monthly jobs gains have averaged around 150,000 for the past three months, down from 238,000 in March through May.
Economists surveyed by Dow Jones expect 170,000 new jobs for September. However, some banks are expecting the number to be higher. Goldman Sachs is forecasting jobs growth of 200,000, while Citigroup thinks it’ll be 240,000.
Our Lean
Keeping things short and sweet today.
Our Lean: Unlike yesterday, I expect a very volatile day. If the ES gaps lower on the open, I’m buying the open or the first drop after the down open. If the ES gaps higher, I would look to sell the gap up or the first rally above and buy the pullbacks, which could be 20 to 50 points.
As for levels, HandelStats, take it away!
Upside: Trade and an hourly close above 4304.25 targets 4313.75, then 4323.25. Hourly close above there targets 4334.50, an hourly close above there would be very positive and target 4349, then 2 sd at 4361.63.
Downside: An hourly close below the 4:15 settlement at 4288.50 targets 4272.50, then 4260.62, then -1sd at 4251.93. Hourly close below there targets 4238.75, then -2 sd at 4215.37.
MiM and Daily Recap
ES 15-min
The ES traded up to 4302 and sold off down to 4287 after the jobless claims number and opened Thursday’s regular session at 4290.75. After the open, the ES rallied up to 4299.50, sold off down to 4279.75, rallied up to the VWAP and a lower high at 4288.75 at 10:00. From there, the ES sold off down to 4273, back-and-filled up to 4284.50 at 10:28 and dropped straight down to 4262.50, back-and-filled a bit and made a new low at 4258.00 at 11:10. For the next hour, it traded sideways-to-up, and rallied up to 4281.00.
After the high, the ES pulled back to the 4264.75 level at 1:10 and then ground its way back up to the big figure at 4300.75, then dropped down to 4288.50 at 3:25, rallied up to 4296.50 at 3:47 and traded 4294.25 as the 3:50 cash imbalance showed $344 million to buy. The ES traded 4291.25 on the 4:00 cash close and after 4:00, the ES down-ticked and settled at 4288.50 on the 5:00 futures close, down 7 points or 0.16% on the day.
In the end, it was a buy-the-dip kind of day. Did you know that the ES made its low for the year on October 3rd, 2022 and so did the DAX? In terms of the ES’s overall tone, it was all buy programs and buy stops after the early dip. In terms of the ES’s overall trade, volume was lower: 300k traded on Globex and 1.324 million traded on the day session for a total of 1.624 million contracts traded.
Technical Edge
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NYSE Breadth: 50% Upside Volume
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Nasdaq Breadth: 43% Upside Volume
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Advance/Decline: 44% Advance
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VIX: ~$18.50
ES
Ultimately a flat day yesterday ahead of Friday’s jobs report.
ES Daily
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Upside: Trade and an hourly close above 4304.25 targets 4313.75, then 4323.25. Hourly close above there targets 4334.50, an hourly close above there would be very positive and target 4349, then 2 sd at 4361.63.
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Downside: An hourly close below the 4:15 settlement at 4288.50 targets 4272.50, then 4260.62, then -1sd at 4251.93. Hourly close below there targets 4238.75, then -2 sd at 4215.37.
NQ
NQ Daily
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Upside: Hourly close above 14941.75 targets 14984, then 1 sd at 15022.31. Hourly close above there targets 15095.75, then 2 sd at 15186.87.
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Downside: Trade and hourly close below 14857.75 targets 14744, then -1 sd at 14693.19. Hourly close below there targets 14657.25, then the week’s overnight low 14589. Below there and 14555.77 is in play, then the -2 sd at 14528.63.
**** Trade after the Employment number this morning, the first 5 minute close after the number has a strong influence on the direction of the trade for the day.
Open Positions
Bold are the trades with recent updates.
Italics show means the trade is closed.
Any positions that get down to ¼ or less (AKA runners) are removed from the list below and left up to you to manage. My only suggestion would be break-even (B/E) or better stops.
** = previously mentioned trade setup we are stalking.
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JPM — Many are long from $143-145. This is a longer term swing. Trimmed $153s, then $157.50+ on 7/24.
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Down to ½ position vs. Break-even stop. Can make small, ~10% position trim if we see $160+
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If worried about a larger correction, can sell/trim north of $150. Below entry and no need to stick around in JPM.
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Economic Calendar
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!
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