Market analysis for March 8th, 2024

Happy Friday to you all! Yesterdays trades went well for me yesterday with some good income coming in to the account. 

NVDA and MSTR continue to give me fits but I'll work them again today. The plan is to de-risk them a little. Drop buying power and build some inner safety legs to maximize income.
We had all four of our 0DTE's hit for a profit yesterday. SPX yielded about 8% return. NDX was about 1.2% return after the roll was factored in and our two event contracts yielded 5% and 10% return respectively.

A couple interesting, new ETF's came on the market yesterday. Roundhill investments issued the XDTE and QDTE that sell 0DTE options on the SPX and NDX indices. Keep an eye on them.

The news catalyst for today in NFP:
Friday 8th March
08:30 ET
US Employment Situation for February
US Nonfarm Payrolls
US Nonfarm Payrolls, commonly referred to as NFP, is a key economic indicator published by the Bureau of Labor Statistics on a monthly basis.
It represents the total number of paid workers in the US, excluding farm employees, government workers, and non-profit organization employees.
The NFP report provides insights into the overall health of the labor market, reflecting changes in employment levels.
The data is closely watched by policymakers, economists, and investors for its impact on financial markets and economic policy decisions.
US Unemployment Rate
The US Unemployment Rate is a widely tracked economic indicator that measures the percentage of the labor force that is unemployed and actively seeking employment.
It is calculated by dividing the number of unemployed individuals by the total labor force.
The Unemployment Rate can differ from the Nonfarm Payrolls data due to differences in their definitions and methods of measurement.
While NFP represents the total number of paid workers in the US, excluding certain categories like farm and government employees, the Unemployment Rate considers the percentage of the labor force that is actively seeking but unable to find employment.
US Average Earnings YoY
US Average Earnings Year-over-Year is an economic indicator that measures the annual percentage change in the average earnings of all non-farm employees in the United States.
This data is typically derived from the monthly employment reports released by the US Bureau of Labor Statistics.
Average earnings include wages and salaries, and the YoY comparison helps assess the rate of change in workers’ compensation over a one-year period.
Positive growth in Average Earnings YoY is indicative of increasing income levels, while negative growth suggests a decline in average earnings. Policymakers, economists, and investors monitor this indicator for insights into wage trends and their implications for consumer spending and inflation.
What to Expect
US NFP is the most closely watched employment indicator by traders and policymakers alike.
A higher-than-expected read indicates that employment is not slowing down, which poses an upside risk to inflation. This could cause policymakers to keep interest rates higher for longer.
This repricing of the future of US monetary policy could be likely to cause weakness in US stocks, and strength in the dollar. The inverse could also be the case.
Having said this, participants will also be looking at the average earnings data to see if increased wages are also causing potential upside inflation risks.
In comments from Powell and other FOMC officials, they have also noted a refocus back onto the ‘dual mandate’, (which includes employment), so while a slight cooling in the employment situation may be seen as reinforcing dovish Fed bets, too much could go against the other element of the Fed’s dual mandate, and increase recession fears.
Unicredit notes that the labor market remains tight, and the unemployment rate is unlikely to rise in a sustained way until monthly payroll gains fall below the around 100k needed to absorb population growth. Consistent with this, initial jobless claims remain low.

Most of the indices are hanging around their all time highs.

Our trade docket for today is typical of most Fridays. We'll be looking to books profits where we can. De-risk and position for next week. It looks like we should have take profit orders right out of the trading gate on all three or our earnings trades from yesterday:
COST, DOCU, MRVL, MSTR, SPX/NDX/Event contract 0DTE's, NVDA, PLTR?, QQQ/SPY?, RIVN, RUM, SMCI, VKTX?

Intra-day levels for me:
/ES; 5157/5168/5174/5187 to the upside. 5140/5131/5119/5105 to the downside.
/NQ; 18270/18330/18357/18382 to the upside. 18250/18185/18137/18081 to the downside.

My lean is neutral today:

Have a great weekend. Get refreshed. We still have a lot of potential earnings setups for next week to look at.