We’re Almost Done. We Just Have the Jobs Report Left

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Our View

With AAPL's earnings out of the way, it all comes down to the “FRY-day” jobs report and weekly options expiration. Sometimes this combination can lead to trend days. It's been a wild week of rips and dips and at the end of it, the ES is at the same price as it was in April 2021 — more than two years ago.

While I see the ES and NQ going down, I am not convinced that the let down is a real reversal yet.

Our Lean

The ES has closed lower in four straight sessions now and given the timing, it has me thinking of one of our Mr. Top Step trading rules: Counter-Trend Friday.

Our Lean: My gut says higher tomorrow as everyone’s offside and it’s “Fry-day” — but ultimately, we want to fade the gap in either direction.

Ideally you want to sell any 50-point rally as the banking crisis is not going away. There’s just too much uncertainty and you can see it in gold, which made new highs yesterday (at $2,085).

As for levels, watch 4135 and ~4150 on the upside. On the downside, 4065-ish is big. It’s last week’s low and now this week’s low too. A break of this level could put the 4030s in play.

I am going to keep it at that. We had a nice little trade shortly after the open, buying the reclaim of the 4075.50 Globex low that gave us 10-12 points on less than 2 points of risk, but that being said, it's been a long week and I for one am looking forward to the weekend.

MiM and Daily Recap

The ES sold off down to 4075.50 on Globex and opened Thursday's regular session at 4094.25. After the open, the ES traded up to 4098.25 and then sold off under the Globex low down to 4073.75 at 9:50, bounced 13 points, back-and-filled for the next 20 minutes and then dropped down to a new low at 4063.50 at 10:31. From there, it rallied up to 4082.75 at 10:48, sold back down to 4071.25, rallied up to 4090.50 at 11:09, traded back down to 4062.25 at 12:09 and then rallied up to 4197 at 1:35.

The ES sold off down to 4071.75 at 2:32, rallied back up to 4181.25 and then dipped back down to a new low by 1 tick at 4071.25 at 2:53. After the low, the ES rallied up to 4088 at 3:05, dipped back down to another new low at 4071 at 3:22 and rallied back up to 4088.25 at 3:37. It traded 4081.75 as the 3:50 cash imbalance showed $290 million to sell and traded 4077.25 on the 4:00 cash close. After 4:00, the ES traded down to 4071, then traded up to 4084 after Apple reported and settled at 4074.50 on the 5:00 futures close, down 33 points or -0.80%. The Nasdaq futures settled down 54.25 points or -0.41%.

In the end, the regional bank weakness overwhelmed the ES. In terms of the ES's overall tone, it was weak. In terms of the ES’s overall trade, volume was high at 1.94 million contracts traded.

Technical Edge

• NYSE Breadth: 32% Upside Volume

• Advance/Decline: 28% Advance

• VIX: ~$19

Exercise patience. Remember, we can afford to wait for the prime setups, even if it means scaling back and getting through a couple of these tougher sessions (Fed, AAPL earnings, Jobs report, etc.)

S&P 500 — ES

Down four days in a row but trying to hold last week’s low

• Upside Levels: 4125, 4135, 4150, 4175-80

• Downside levels: 4060-65, 4025-35

SPY

Gapped below $408 and couldn’t fill it yesterday. Now we have to see if the SPY can hold last week’s low, which it did quite well on Thursday.

• Upside Levels: $408, $410.50 to $411, $412.50

• Downside Levels: $403 to $403.50, $399 to $400

SPX

• Key Pivot: 4050

• Upside Levels: 4090, 4113, 4130, 4150

• Downside Levels: 4035, 4000, ~4075-80

QQQ

• Upside Levels: $320, $322.50, $323.65, $325

• Downside Levels: $315, $312.50, $309.90

NQ

Notice that, despite all the noise, we are basically just stuck between 12,950 and 13,300.

• Upside Levels: 13,175, 13,230, 13,300-10

• Downside Levels: 13,000, 12,925 to 12,950

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 B/E or better stops.)

• ** = previous trade setup we are stalking.

Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B

1. ** WYNN — watching for the breakout over ~$117, but not expecting it today.

2. ** CMG — Closely watching that buy-the-dip setup.

Go-To Watchlist

Feel free to build your own trades off these relative strength leaders

Relative strength leaders →

1. MCD, PEP & KO, WMT, PG — XLP

2. LLY

3. NVDA, CRM

4. MSFT, AAPL, META

5. PANW, FTNT (10-week/50-day combo & prior breakout level)

6. ULTA, LULU, CMG

• GE

• HCA

• DKS

• WYNN

• MELI

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!