The News You’ve Been Waiting For All Week
Stock index futures opened Thursday’s session
with a small upside gap after Q4 Productivity and Weekly Jobless Claims offered
no surprises. Trading was choppy off the open, but the ES and YM managed to fill
most of their gaps. Price continued its choppy and sloppy low volume way until
a little broker buying was enough to push the futures through the session high
for a test of R1 resistance at 1,130. But after 3 attempts, the buying simply
dried up, taking the contract back down for a test of its Daily Pivot where
previously broken triangle trend lines kicked in as support.
The March SP 500 futures closed
Thursday’s session with a gain of +2.50 points, and finished right at the median
of the session. Volume in the ES was estimated at 771,000 contracts, which was
ahead of Wednesday’s pace, and above the daily average. Looking at the daily
chart, the contract posted a market structure low and continues to consolidate
below its 20-day MA and above last week’s low at 1,121. On an intraday basis,
30-min and 13-min triangles broke to the upside, led by the 60-min chart. Right
now, aside from any news moves, we’re going to be dealing with a congestion area
highlighted by 60-min and 13-min support at 1,126.50 and 30-min resistance at
1,128.
The VIX has crossed up through
its 100-day MA and could lend some additional support here since it failed to
hold that level on its previous 3 attempts.
Friday morning gives us the
news that traders have been waiting for all week: the January Employment
report. The employment rate is expected to remain steady at 5.7%, but the
market will be watching the Non-Farm Payrolls number, which is expected to come
in at 165,000. If you remember last month, the estimate was off only by
150,000, and with so much build-up and hype this week, I wouldn’t be surprised
if it was a non-event. While the market has seen pressure the past 10 days, the
overall tone is more of a lack of catalysts for new money to come in, especially
with earnings season winding down, rather than shorts getting aggressive.
Please feel free to email me with any questions
you might have and have a great trading day tomorrow!