Back in balance
Hey team. Markets made a nice recovery today, aligning with our expectations for long opportunities for the day, posted on our market brief this morning on X.
Let’s re-cap today’s session and see what’s next for the market!
Impact Snapshot
US initial jobless claims decline by most in nearly a year
S&P 500 Notches Biggest Rally Since November 2022
Market Evaluation
Stocks made a strong recovery after the latest U.S. labor market data eased worries about a deeper slowdown in the world's largest economy.
New labor market data boosted investors confidence in the U.S. economy following a sharp market sell-off earlier in the week.
The number of Americans who applied for unemployment benefits last week sank to 233,000 and receded from a one-year high, a sign the labor market is still in good shape despite a poor July jobs report.
Markets have been in turmoil since last week’s economic data sparked fears that the Fed may be delaying rate cuts from a two-decade high, threatening hopes for a “soft landing.”
This anxiety, along with stretched market positions, disappointing tech earnings, and poor seasonal trends were among the factors triggering volatility.
Markets Breakdown
Today’s focus on our market report posted here was to look for a potential safer entry opportunity for longs after the emotional reaction to the jobless report.
We’ve been highlighting this market behaviour to pay attention to on economical releases for some time now.
Market made one directional swing to the upside at the time of the release, then shed 20 points lower which was the “swing to the other side” comment we’ve made, providing a massive opportunity for longs to go higher. Read the update here.
Entering a trade doesn’t take time, preparing and waiting for it should. Looking for safer opportunities and refraining from pilling on unfavourable positions is key.
The much anticipated “range formation” we’ve been talking about has taken shape as the market is now on a clear balancing range with overlapping value areas.
The balance guidelines are applicable to close the week:
Look above and go. Prices move above the high of balance and find acceptance and continue higher. The target should be double the balance area.
Look above and fail. Prices move above the balance high but fail to find acceptance and reverse back into the balance area. This is now a short with a stop above the high just outside of balance that was recently made, with a target to the opposing low end of the balance area.
ES
Some references we’ll be looking going forward:
Upside Levels: 5387/5432/5452
Downside Levels: 5292/5271/5252
That’s all we got!
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