The Market Brief
Hey team. Stock futures were higher early Friday as traders anticipated a big payrolls report due this morning which will provide a key labor-market snapshot.
Let’s re-cap Thursday’s session and see what’s next!
Impact Snapshot
🟥 Non-Farm Payrolls - 8:30am
🟥 Unemployment Rate - 8:30am
🟥 Fed Chair Powell Speaks - 12:30pm
Macro Viewpoint
This week, financial markets have been rocked by geopolitical uncertainty and mixed messages from the US regarding tariffs, setting the S&P 500 up for its steepest decline since September.
Highlighting the rising tide of risk aversion, Wall Street couldn’t stage a recovery even after Trump put a hold on tariffs for certain imports.
As worries about tariffs pivot from their possible inflationary effects to the harm they might inflict on the economy, traders will get a glimpse of the labor market’s health with the release of US non-farm payrolls data later on Friday.
Jerome Powell is scheduled to take the stage at a monetary policy forum in the afternoon.
Prior Session Deep Dive
Whatever happens in the market can probably be explained on anyone's strategy or trading model they use. "Market gone there cuz my indicator showed this" or "X headline drove the market lower".
Some will argue that only momentum matters in the market and focusing on the real-time indicators is “all you need.”
The reality is different and there are things that you can see through market structure, before all the above could have ever happened.
After all, this is what we do in here for years at this point.
The only first references we shared for both sides during yesterday's session were 5821 and 5729, despite this being around a 100-point range to get from one to the other. Knowing how much room the market has to fall or to go to will drastically affect where you book your profits and set your expectations in order for reversals.
Adding to the sentiment was a section we've shared yesterday on our publication, named "Absorption". When absorption like this takes place during the overnight with that much volume, it can further add to the sentiment.
All the above were clues we've used on our market preparation when no news, no economical releases, or any of the candlesticks could have ever existed at that time.
This is not an "I told you so" post, although it could be. "LoOk, My MoDeL cAuGhT iT, PeRfEcT ReJeCtIoN & BoUnCe"-Influencing LARP on Youtuber behind the REPLAY button.
Trading, like any worthwhile pursuit, is a lifelong learning journey.
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What we do in this Substack is attempt to communicate all these nuances we’ve accumulated over the years so you can build a solid foundation of what is really going on behind the market’s surface, no matter what market you trade or which strategy you’re using.
Develop better context and create a robust entry model by understanding all the market nuances we share on a daily basis. This will help you build the market understanding that most traders lack.