September Kicks Off With the Non-Farm Payrolls Report

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Our View

The Opening Print will never be perfect. If it was...I would buy a big boat and float away.

The fact of the matter is, no newsletter can call it right every day. If they are right 50% of the time, I think that's pretty good. I'm going to keep it short, no we didn't get to 4550, but there were some good pullbacks to buy and I warned about the “end of the month walk away” in the Lean.

And what happened?

At 2:30 the ES traded up to 4533.50, the high of that push, and dropped down to 4512.75 at 4:00. I never pat myself on the back because I was right; I am just happy that the “end of the month walk away” warning was added at 8:30 am before the newsletter went out.

I have been told by a few traders who have read the OP for 10 to 15 years that it's not the levels they are looking for, it's the tone and sometimes when they think the same thing, it just reinforces the idea. 

Either way it's not an easy task calling the direction of the S&P!

Our Lean

Yesterday was a shitty close — the walk away — but that doesn't mean the ES can’t go straight back up.

A few of the main points today? The monthly jobs number and 'thin to win.'

Surprisingly the ES's volume was almost 1.35 million yesterday, but I think after the initial move this morning, things will slow quickly as more people take advantage of the long holiday weekend. That doesn’t mean the ES won't be moving around, it just means fewer humans for the BOTs to screw over.

I have to be honest, while I still think we can see higher prices, the selloff in the YM was somewhat telling and so is the YM comparison chart below. The first chart is from April 2022 compared to the last few days of action.

As you can see in 2022, the YM reversed on Thursday, exactly like it did yesterday and fell 1,800 points over the next two days. If this chart plays out there, the YM could drop pretty significantly in the short term.

Our Lean: Comparisons aside, if the ES gaps higher this morning on Globex volume of 300,000 or more, I will be looking to sell the open or the first rally above the gap up. The flip side is true if we gap down on heavy volume.

As always I'm an equal opportunity trader; whether the ES is going up or down I want to go for the ride.

MiM and Daily Recap

The ES traded up to 4541.25 on Globex and opened Thursday's regular session at 4427.75. After the open, the ES traded 4525 at 9:47 and slowly rallied up to 4539.75 at 10:42, then slowly sold off down to 4515 at 12:50. After the low, the ES rallied up to 4533.50 at 2:30. Yes there were some minor highs and lows along the way, but clearly it was a low-volume day.

After the push, the ES sold back off to the 4519.25 at the 3:01 level and then stutter-stepped up to the VWAP at 4528.25 and started to down ticked as the early MIM showed $275 million to sell and traded 4525.50 as the 3:50 cash imbalance showed $250 million to sell and then dropped to $1.56 billion to sell and traded down to 4512.75 on the 4:00 cash close. After 4:00, the ES slowly up-ticked to 4519.25 and settled at 4517.25 on the 5:00 futures close, down 9.75 points or -0.22% on the day.

This was a post I put in the MrTopStep chat late in the day when I was long both the ES and NQ:

• IMPRO: Dboy :(3:26:07 PM): A lot of volume will trade on the cash close and the 4:00 bell while I think we can pop I'm not sure there there won’t be some selling tied to today’s imbalance

At 3:49 the ES traded 4528.25 down to 4512.75 not long after this post.

In the end, there really isn't much to say. With the Labor Day holiday upon us, one thing was clear: Fewer people were trading. In terms of the ES's overall tone, a lot of the early selling showed up in the YM (Dow futures). At one point, it was up more than 220 points from yesterday’s close, then fell more than 400 points to the session low. In terms of the ES’s overall trade, 233k ES traded on Globex and 1.116 million traded on the day session for a total of 1.349 million contracts traded.

Technical Edge

• NYSE Breadth: 38% Upside Volume

• Nasdaq Breadth: 52% Upside Volume

• Advance/Decline: 50% Advance

• VIX: ~$13.50

S&P 500 — ES Futures

4540-4560 remains notable.

• Upside Levels: ~4550, 4570-74

• Downside levels: 4510-12, 4495-4500, 4475-80

NQ

Can the NQ take out yesterday’s high of ~15,607 or its low of 15,460?

• Pivots: 15,607, 15,460

• Upside Levels: 15,650, 15,750, 15,875

• Downside levels: 15,400-425, 15,300-330, 15,250-60

Open Positions

Down to Runners in GE, CAH, LLY, ABBV, AAPL, MCD & BRK.B. Now Add META, AVGO, UBER, CRM, AMZN, CVS, AMD, TLT and YM.

1. JPM — Many are long from $143-145. This is a longer term swing. Trimmed $153s, then $157.50+ on 7/24.

   1. Down to ½ position vs. Break-even stop. Can make small, ~10% position trim if we see $160+

   2. If worried about a larger correction, can sell/trim north of $150 and look to re-establish lower (if we get it).

2. XOM — Long from the monthly-up area at $108.50 — First ¼ or ⅓ trim is $112 to $112.50. Next target is $115+. Stops at $104.

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!