What has caused market weakness? Bill Baruch dives into the recent selling, the Fed put, and gaming odds of a 50bps cut.

E-mini S&P (September) / E-mini NQ (September) 

S&P, yesterday’s close: Settled 5512.25, down 17.75 

NQ, yesterday’s close: Settled at 18,963.50, up 1.00 

The August Nonfarm Payrolls report is due at 7:30 am CT. Expectations are for 164k jobs created and a drop in the Unemployment Rate to 4.2% from 4.3%. Wage Growth is expected to firm a bit, +0.3% m/m from +0.2% in July, and +3.7% y/y, up from +3.6%. We have noted that the Federal Reserve is now labor-dependent, as opposed to inflation-dependent, meaning they will come to the rescue more quickly. E-mini S&P and E-mini NQ futures acted poorly after the private ADP survey printed only 99k jobs versus the 144k expected. We have also vocalized our belief that the market is front-running a bad Nonfarm release, which Bill Baruch discussed in more detail on the CNBC Halftime Report yesterday (shown above).
Price action is lower overnight, leaving a gap at yesterday’s settlement. For the E-mini S&P futures, this creates major three-star resistance at 5512-5516.75. Ultimately, failed rallies on both Wednesday and Thursday have created a ceiling of major three-star resistance in which both indices must clear in order to begin repairing this week’s damage. The E-mini S&P has its next major three-star resistance at…

Want to keep up with the market? 

Subscribe to our daily Morning Express for essential insights into stocks and equities, including the S&P 500, NASDAQ, and more. Get expert technical analysis, proprietary trading levels, and actionable market bias delivered straight to your inbox.

Sign Up for Free Futures Market Research – Blue Line Futures

Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.