Market analysis for Oct. 4th, 2024

Welcome to Friday traders.The gateway to the weekend! We've had one heck of a week. I'm so grateful for our results. This extended win streak will end. They always do but, what we are doing is working and beyond the financial rewards its also nice to know that you have a system and that system is producing, We were active most of the day yesterday with multiple entries. For the most part they paid off well. Here's a look at our results.

The tenative longshoreman agreement gave us our profit on the Theta Fairy in record time. Our entry and take profit orders both triggered within almost a two hour window. We'll look to get another on this morning right before NFP data is released.

Let's take a look at the markets. Futures are swinging up back to bullish bias.

Not much change in the overall makeup of the indices. Will NFP be the catalyst that get the next directional move working? We'll find out today.

​December S&P 500 E-Mini futures (ESZ24) are trending up +0.18% this morning as investors braced for the all-important U.S. jobs report to further gauge the size of the next Federal Reserve interest rate cut.
In yesterday’s trading session, Wall Street’s major indices closed lower. Constellation Brands (STZ) slid over -4% and was the top percentage loser on the S&P 500 after the company reported weaker-than-expected Q2 revenue. Also, Tesla (TSLA) fell more than -3% and was the top percentage loser on the Nasdaq 100 after Bloomberg reported that Chief Information Officer Nagesh Saldi was departing from the company. In addition, Levi Strauss (LEVI) slumped over -7% after the company reported weaker-than-expected Q3 revenue and cut its full-year revenue growth guidance. On the bullish side, MarketAxess Holdings (MKTX) climbed more than +7% and was the top percentage gainer on the S&P 500 after posting a record total average daily volume of $45.2 billion in September, an increase of 8.6% m/m and 52.5% y/y.
Economic data released on Thursday showed that the U.S. ISM services index rose to 54.9 in September, stronger than expectations of 51.7 and the fastest pace of expansion in 19 months. Also, the U.S. September S&P Global services PMI was revised lower to 55.2 from the preliminary estimate of 55.4. In addition, U.S. factory orders unexpectedly fell -0.2% m/m in August, weaker than expectations of +0.1% m/m. Finally, the number of Americans filing for initial jobless claims in the past week rose +6K to 225K, compared with the 222K expected.
“Amid robust consumer spending, the large services sector continues to add backbone to the expansion, likely weighing toward a smaller quarter-point rate cut from the Fed in November,” Sal Guatieri, senior economist at BMO Capital Market, said in a note.
U.S. rate futures have priced in a 69.3% probability of a 25 basis point rate cut and a 30.7% chance of a 50 basis point rate cut at November’s monetary policy meeting.
Meanwhile, market participants continue to keep a close watch on developments in the Middle East. Investors are worried that Israel may soon launch retaliatory strikes on Iran, possibly targeting Iran’s oil facilities, in response to Tehran’s missile attack on Israel.
In other news, U.S. dockworkers agreed to end a three-day strike that had disrupted trade along the U.S. East and Gulf coasts. The International Longshoremen’s Association and the U.S. Maritime Association announced on Thursday that they have extended their prior contract until January 15th, according to a joint statement from the two organizations.
Today, all eyes are focused on the U.S. monthly payroll report, which is set to be released in a couple of hours. Economists, on average, forecast that September Nonfarm Payrolls will come in at 147K, compared to August’s figure of 142K.
U.S. Average Hourly Earnings data will also be closely watched today. Economists expect September figures to be +0.3% m/m and +3.8% y/y, compared to the previous numbers of +0.4% m/m and +3.8% y/y.
The U.S. Unemployment Rate will be reported today as well. Economists expect this figure to hold steady at 4.2% in September.
In addition, market participants will be anticipating a speech from New York Fed President John Williams.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.853%, down -0.10%.

I don't have a directional bias or lean today. NFP will be the catalyst and it should dictate a lot of todays price action.

I also don't work off support/resistance levels today. NFP can be a bigger mover than FOMC days. I'll let the algos do what they do. Be patient and look for entries a little later in the day.

Trade docket for today:
/ES (Theta fairy), /MNQ,QQQ scalping, /MCL, FDX, FSLR, MSTR, PYPL, SPY/QQQ 4DTE's, SMCI, WYNN.

See you all in the trading room! I've got some good stuff to go over on butterflies.