Market analysis for April 8th, 2024

Welcome back traders! We had a nice finish to the week last Friday. My net liq was back up 9k after Thursdays 0DTE rolls. NVDA and MSTR continue to do a lot of the heavy lifting. Our MSTR in particular looks set for a monster week with bitcoin soaring againg this morning. We rebounded Friday with successful 0DTE's on NDX, SPX, MSTR and the Event contracts on both Bitcoin and NDX. If you like 0DTE trades and you want the most volume of opportunity out there, we've got em setup for you! 

Let's take a look at the market:
We are bouncing between Neutral and slight Buy rating right now on the futures.

The market is looking to retake the bullish price action. Each of the major indices we trade is still sitting above their respective 50DMA albeit the DIA just barely. 

​An interesting change of pace was seen on the SPY daily chart this week, with the price closing below the 21-period EMA for the first time this year. Despite closing only moderately lower than last week at $518.43 (-0.89%), the clear bearish RSI divergence is cause for concern.

Much like the SPY, the QQQ also struggled with its 21-period EMA this week, failing to regain it after Thursday’s selloff and closing at $440.47 (-0.80%). The Relative Strength indicator continues to deteriorate, suggesting weakness under the hood.

​The small caps were the weakest performers of the group this week, closing at $204.45 (-2.78%). Much like its more favored counterparts, the IWM is also showcasing clear bearish RSI divergence while the price struggles below the 21-period EMA.

The U.S. Labor Department’s report on Friday showed that nonfarm payrolls advanced by 303K jobs last month, well above the 212K consensus and the biggest increase in 10 months. Also, the U.S. March unemployment rate edged lower to 3.8%, stronger than expectations of no change at 3.9%. In addition, U.S. average hourly earnings came in at +0.3% m/m and +4.1% y/y in March, in line with expectations. Finally, U.S. February consumer credit rose +14.12B, weaker than expectations of +16.20B.
“Bang! Employment up, rate cuts need to come out. The Fed will likely need to reconsider its current stance of three rate cuts this year. But, the reason for this likely change in posture is bullish - the economy is doing well,” said George Mateyo at Key Wealth.
Dallas Fed President Lorie Logan said on Friday that “it’s much too soon” to contemplate reducing interest rates, pointing to recent high inflation figures and indications that borrowing costs might not be restraining the economy to the extent previously thought. Fed Governor Michelle Bowman also expressed her concern regarding potential upward risks to inflation, emphasizing that it’s “still not yet” time to cut interest rates.
U.S. rate futures have priced in a 4.5% chance of a 25 basis point rate cut at the next FOMC meeting in May and a 46.2% probability of a 25 basis point rate cut at June’s policy meeting.

The big, pre-planned news catalysts this week will be inflation based, once again. CPI on Weds. and PPI on Thursday.

My lean today is ever so slightly bullish:

Trade docket for today: LULU, /MCL, /ZN, BA, CCL, DELL, FSLR, GLD, KRUS, MSTR, NVDA, SBUX, IWM, CRM, ORCL, PYPL, PLTR, SHOP, SPY/QQQ, 0DTE's on NDX/SPX/Event contract NDX and Event contract on Bitcoin. TLRY and AEHR earnings plays.

Intra-day levels for me:
/ES; 5254/5272/5285* (PoC on 2hr. chart) 5242/5225/5212/5194 to the downside. 

/NQ; 18329/18405/18446/18485*( PoC on 2hr. chart) to the upside. 18272/18188/18132/18051 to the downside.

Levels for Bitcoin: 75107 resistance. 67720 is support and also PoC on 4 hr. chart.
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Have a great week folks. Earnings season ramping back up with Banks later this week! We should also have more pairs trades setups this week.