Market analysis for Sept. 9th, 2024

Welcome back traders! Scalping and a roll on NDX debit drug me down, results wise on Friday but our NDX roll looks like its got a great shot at bringing in the green today. Here's my results from Friday. 

September is generally not a great month for the markets. This month seems to have started out in that typical fashion. We've got a bullish setup on both the NDX and SPX coming into this new week. The trend has been bearish and the technicals are all still bearish, as well. There are still a couple big support levels down below current levels that could come into play but...I believe we are at a good entry point for longs.
My bias going into this trading day but more importantly, this week is swingning back to bullish. 

Technicals are still bearish.

As you can see from the price action, we are back to key consolidation zones.

​The bearish MACD cross was the tell this week, as the SPY sold off heavily and closed at $540.36 (-4.12%). The GoNoGo indicator is signaling a neutral reading while the price hovers just above a volume pocket that’s buttressed by the 100-SMA and the aVWAP from the April low. Bulls will want to see this area hold if it gets tested in the sessions to come.

​The QQQ appears to be in the worst shape of the major indexes, closing below the 100-SMA and aVWAP from the April low and ending the week at $448.69 (-5.79%). Like the SPY, the bearish MACD cross was the tell, and the ‘strong no-go’ reading from the GoNoGo indicator says bulls should remain on the sidelines for now.

​IWM is at a critical juncture, having broken below the aVWAP from the April low and closed at $207.90 (-5.50%). Support was found on Friday at the 100-SMA, but the bearish MACD cross and the ‘no-go’ reading from the GoNoGo indicator cautions the potential for more downside risk.

​September S&P 500 E-Mini futures (ESU24) are up +0.74%, and September Nasdaq 100 E-Mini futures (NQU24) are up +0.95% this morning, partially rebounding from Friday’s losses driven by weaker-than-expected U.S. payroll numbers, while investors looked ahead to the release of U.S. inflation data later in the week.
In Friday’s trading session, Wall Street’s major averages ended in the red, with the benchmark S&P 500 dropping to a 3-1/2 week low, the blue-chip Dow falling to a 3-week low, and the tech-heavy Nasdaq 100 sliding to a 4-week low. Broadcom (AVGO) plunged over -10% and was the top percentage loser on the S&P 500 and Nasdaq 100 after the semiconductor and software giant issued weaker-than-expected Q4 revenue guidance. Also, megacap technology stocks lost ground, with Tesla (TSLA) slumping more than -8% and Amazon.com (AMZN) falling over -3% to lead losers in the Dow. In addition, Super Micro Computer (SMCI) slid more than -6% after JPMorgan downgraded the stock to Neutral from Overweight. On the bullish side, Samsara (IOT) surged over +13% after the company posted upbeat Q2 results and raised its full-year guidance.
The U.S. Labor Department’s report on Friday showed that nonfarm payrolls increased by 142K in August, up from the 89K added in July (revised from 114K), but still falling short of the 164K consensus estimate. Also, the U.S. August unemployment rate ticked down to 4.2% from 4.3% in July, in line with expectations. In addition, U.S. average hourly earnings came in at +0.4% m/m and +3.8% y/y in August, stronger than expectations of +0.3% m/m and +3.7% y/y. 
“August employment data continue the portrayal of an economy running out the string, nearing an inflection point,” said Steven Blitz at TS Lombard. “Whether inflection turns into recession, or something less negative, depends upon how aggressive the Fed counters current negative momentum. Does the Fed go 25 or 50?”
New York Fed President John Williams stated on Friday that the central bank should now lower interest rates, given the progress in reducing inflation and a slowdown in the labor market. “With the economy now in equipoise and inflation on a path to 2%, it is now appropriate to dial down the degree of restrictiveness in the stance of policy by reducing the target range for the federal funds rate,” Williams said. Also, Fed Governor Christopher Waller said that it is crucial for the central bank to start reducing interest rates this month due to increasing risks of further weakening in the labor market. Waller noted he is also “open-minded” about the possibility of a larger rate cut and would support one if deemed appropriate. “The balance of risks has shifted toward the employment side of our dual mandate, and that policy needs to adjust accordingly,” he said.
U.S. rate futures have priced in a 75.0% chance of a 25 basis point rate cut and a 25.0% probability of a 50 basis point rate cut at the Fed’s monetary policy committee meeting next week.
In the coming week, the U.S. consumer inflation report for August will be the main highlight. Also, market participants will be monitoring other economic data releases, including the U.S. PPI, Core PPI, Crude Oil Inventories, Initial Jobless Claims, Export Price Index, Import Price Index, and Michigan Consumer Sentiment Index (preliminary).
Several notable companies like Adobe (ADBE), Oracle (ORCL), Kroger (KR), and GameStop (GME) are set to report their quarterly figures this week.
Meanwhile, the first U.S. Presidential debate between former President Donald Trump and Vice President Kamala Harris is set to take place on Tuesday.
Today, investors will focus on U.S. Consumer Credit data, which is scheduled to be released later in the day. Economists, on average, forecast that July Consumer Credit will stand at $12.30B, compared to the previous figure of $8.93B.
U.S. Wholesale Inventories data will be reported today as well. Economists expect July’s figure to be +0.3% m/m, compared to +0.2% m/m in June.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 3.759%, up +1.45%.

Let's look at the expected moves this week: There looks to be plenty of I.V. If we can't make some decent money this week, it won't be the fault of the premium we are bringing in.

Trade docket today: /MNQ, QQQ scalping, DELL, FSLR, F, /MCL, SPY 4dte, ORCL earnings play. 0DTE's.
A couple notes on our trade setups. Kalshi has been working on some new stikes and setups for our crypto and NDX 0DTE's. We should be back on those, next week.

Let's take a deep dive into the intra-day levels I'll be watching today for 0DTE setups.
​/ES; Looking at the daily chart you can see that most signals are still bearish however, Stoc is way oversold territory and RSI is actually headed back up. 5295 is PoC and the next big support zone. That's about 150 points lower than current levels so clearly there is a threat of more downside to come but we never try to catch the exact bottoms or tops.

/ES; 2 hr. chart. 5480 is the first resistance then comes 5501. Support is at 5425 then 5394.

/NQ; Showing some selling exhaustion here. Technicals look oversold. PoC is 18258. We are very close to it. That would be the next big support level. 

/NQ 2 hr. chart.  18730 would be first resistance. 18834 is next. Resistance is quite a ways up. Support is 18488 the 18345.

Schedule note: This Weds. will be a travel day for me. We'll be able to get some earnings trades and longer term setup working but no 0DTE's. Thurs and Friday we'll be trading but no zoom feeds. Back to normal schedule the following Monday. 
Let's have a great day folks!