Market analysis for March 6th, 2024

Good Wednesday to you all! Yesterday was a strange one for me. We have an approach of judging our results via the change in our net liq. We call is "Gestalt". We could do 10 trades in a day and have losses on 9 of the 10 but, if our net liq is up, we call it a win. Yesterday was a pretty successful day for me. All three of my 0DTE's made money. Scalping is a, yet to be determined as I rolled some long QQQ calls into today. Overall it was a pretty solid effort but, it wasn't reflected in my net liq which went down. I have two big positions in NVDA and MSTR that both look o.k. but simply hurt me yesterday in the P/L dept.

Tenative trade docket for today: CRWD, CVNA, DELL, GCT?, SMCI, DWAC?, GLD?, IWM, META, MSTR, NVDA, ORCL?, SPX/NDX/Event contract 0DTE's, VKTX, XBI?, ZM, JD?

Other than booking profit on our CRWD earnings setup, which looks great pre-market and possibly a post earnings play on JD, we have no earnings plays for today. Tomorrow ramps up with MRVL, DOCU and COST.

Once again, I'll plead with you to take a look at event contracts as a way to build "edge" into your 0DTE trading. We had another profitable day yesterday on a setup that, once again, I was wrong on. I don't think I've been right on my calls on the last seven of these setups! It hasn't mattered as they continue to perform and every one has made us money. If you need help getting started with them, just hit me up. Its no cost to get started and you can build your first trade with less than you would spend going out for dinner. Use the link below to open an account, for free at Kalshi. The #1 source for event contracts in the U.S. 

Markets sold off yesterday and it presents the same question as the last umteenth (is that a word?) times...is this signaling a change of direction and market bias or is it just another "buy the dip" opportunity. It certainly looks like a "buy the dip" opportunity to me (thats why I rolled our long QQQ options to today). We briefly dipped, technically into a sell mode signal, which lasted for a whole couple of hours! As we start this morning we are now back to neutral rating.

The damage done yesterday was largely contained to Tech and Healthcare.

The A/D line wasn't a bearish as the NDX seemed to imply. 

Bitcoin continues its charge higher. Looking for new ATH levels.
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Gold is also flirting with ATH. Keep an eye on Gold. We trade a Gold ladder strategy and premiums are starting to pump.

Expected moves in the SPX have jumped about 30% for the next weeks trading window. 

Yesterdays retrace basically wiped out all of the gains from the last week of trading. 

We are starting to see some divergence in the big cap weighted underlyings that have been pushing us higher. Look at the 2hr. charts of AAPL and MSFT.

Intra-day levels for me:
/ES; 5121/5131/5158* (key level. yesterdays high)/5179 to the upside. 5099/5085/5063* (key level. yesterdays low)/5039 to the downside.
/NQ; 18163/18261/18372* (key level. yesterdays high)/18439 to the upside. 18038/17963/17880/17827* (key level. Yesterdays low) to the downside.

We've got several economic reports out today that could be market movers:
Wednesday 6th March
08:15 ET
US ADP Employment Change for February
The ADP Employment Change compiled by the ADP Research Institute utilizes actual payroll data from a diverse array of private-sector employers to gauge changes in employment levels.
Excluding government and farm employment, the ADP figures provide insights into the dynamics of the private labor market, covering small, medium, and large businesses.
What to Expect
While the Fed does wish to uphold its dual mandate of 2% inflation with maximum job growth, an overly hot reading may have negative implications for the future of inflation. This could send the dollar up and stocks down.
09:45 ET
BoC Rate Decision
The Bank of Canada Interest Rate Decision is the main monetary policy tool where the Bank of Canada’s Governing Council determines the official interest rate for the Canadian economy.
This rate, known as the overnight rate, influences short-term interest rates and serves as a key benchmark for borrowing costs in the country.
What to Expect
The Bank of Canada uses this rate to achieve its inflation target and support overall economic goals. Changes in the interest rate can impact consumer spending, business investments, and inflation.
It is widely expected that the BoC will leave rates unchanged at 5%.
If realized, attention will turn to the subsequent BoC rate statement for any clues on the future path of BoC interest rates.
Any mention of more rate cuts this year than are already priced in by the markets could prompt strength in Canadian stocks and weakness in the Canadian dollar.
However, hawkish remarks implying fewer interest rate cuts than are currently priced this year could result in the opposite.
10:00 ET
US JOLTS Job Openings for January
The US Job Openings and Labor Turnover Survey (JOLTS) provides monthly data on job openings, hires, separations, and other labor market dynamics in the United States.
It offers insights into the demand for labor and the overall health of the job market.
Job openings represent unfilled positions that are actively being recruited for by employers.
Analyzing JOLTS data helps assess trends in job creation, labor market tightness, and worker mobility, providing valuable information for understanding the dynamics of the US labor market.
The JOLTS data is the oldest bit of employment data this week, representing the month of January, while ADP and Nonfarm Payrolls reports represent the month of February.
Having said that, with employment a key piece of the Fed’s monetary policy puzzle, markets will still monitor this.
What to Expect
If JOLTS comes in higher than expected, that indicates there are a larger number of job openings, which means that there is demand on the corporate side to hire more staff.
This can be seen as an upside inflation risk, and a threat to the Fed’s 2% inflation target, as higher demand for staff indicates corporations are not being affected as the Fed would like by tight monetary policy.
This could cause strength in the dollar and weakness in US stocks.
“The series has been very volatile, perhaps reflecting low survey response rates,” Unicredit notes.
10:30 ET
Weekly EIA Crude Oil Inventories
The US Weekly Energy Information Administration Crude Oil Inventories report provides information on the total stockpile of crude oil in the United States.
It includes data on the changes in crude oil inventories, indicating whether there has been an increase or decrease in the amount of oil held in storage.
This report assesses supply and demand dynamics in the oil market and can influence oil prices.
What to Expect
A significant buildup in inventories may indicate oversupply, putting downward pressure on prices, while a decline may suggest increased demand, potentially impacting prices in the opposite direction.
14:00 ET
Fed’s Beige Book
The Federal Reserve’s Beige Book, formally known as the Summary of Commentary on Current Economic Conditions, is a report published eight times a year.
It provides anecdotal information on current economic conditions in each of the 12 Federal Reserve districts, based on interviews with business contacts, economists, market experts, and other sources.
The Beige Book serves as a qualitative assessment of the economy, offering insights into trends in various sectors such as manufacturing, retail, real estate, and agriculture.
What to Expect
The Beige Book is extremely unlikely to move the markets, as the data is anecdotal; however, it can still provide some important context to the affects of the Fed’s monetary policy on real people’s businesses in a more tangible way.

Maybe more important. We have Powell speaking at 10:00 EST and FED's Daly and Kashkan are speaing a little later. There seems to be a lot of focus on Powells speech today.

We'll be watching oil inventory results and how that effects our oil ladder setup.

My overall lean for the day:

Have a great day. Trade small...trade often.