September 6, S&P500 Premarket Plan and Missal
(P)revisions
Image 1. That’s NOT how you hold a shopping cart. Unless you’re the BLS in election year
The NFP data will bring higher volatility as it sets the tone for the FOMC mid-month. Put-call ratio is at an extreme on the year as fear is palpable yet again after the carry trade shake-up (what percent is unwound again? You tell me and I’ll believe it). Personally I won’t read much into NFP as it’s a made-up number suitable for the ruling party / class. And as such it’s already perfectly priced in.
Just ask the fat guys at 5500 yesterday.
Practice tighter risk management today, wider stops or smaller size. Or better yet take the dogs and the cat for a walk.
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Crow’s Nest
Quick plan today with wider levels. Note the nearly-filled gap (within two points on Thursday) and the reaction in/around it at the open for early clues. An IB close above 5512 would likely lean bullish, while a close in or below the gap can expose lower levels, specifically into 5450.
To give credit to the buyers on Thursday, they did manage to bid up the ATH AVWAP (confluence with the August swing low AVWAP) into the close. Time is key here.
Today’s pivot is 5530, or Thursday’s afternoon high. You may remark on the pivot dropping around ten points daily as value slips lower. My lean is overall bullish with early bids over 5511.
Update: the data is a perfection of nonsense from the BLS kitchen. Unemployment met expectations at 4.2%, economy is fine! While employment growth at 142k was in line with BLS’ expectations - but below consensus. Watch this be revised later. June and July were revised down a combined 89k. A data salad buffet!
Friday Plan and Levels
Pivot 5531. This is Wednesday’s closing spike high - again buyers needs to see consecutive closes ABOVE to trap sellers and aim for lows of balance. Model is coming in on the aggressive side for range at 67 points and 15 points overshoot.
Image 3. ES partial balance and daily profiles
a) Defense of the ONL / 5469 NPOC, over PDL 5490, break of ONH look for consecutive closes over pivot. Similar levels above: 5543 50DMA, 5558 PDH to 5568 where selling may be encountered. Momentum could see NPOC 5577 / balance low. Recall further levels 5595 and 5602.
b) Time below pivot, below 5511, look to break PDL on volume into the ONL / 5469. Further weakness targets 5452, 5445, with 5432 (confluence 100DMA and 5% sell level) at an extreme.
c) VIX pivot at key psych 20 level. Consider seller strength above 21.50, and buyers potentially supported below 19.20.
Image 4. ES Daily levels
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