As the week unfolded, we pointed to the selling, in part, front-running fears of a weak Nonfarm Payrolls report, especially after Thursday’s ADP. One might wonder why Friday was so ugly.
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, last week’s close: Settled 5419.50, down 92.75
NQ, last week’s close: Settled at 18,458.25, down 505.25
Disappointing job growth in Friday’s August Nonfarm Payroll report at 118k versus 139k expected, with July revised down 23k, sparked growth fears and led to a violent selloff across risk-assets; the E-mini S&P finished -1.7% and E-mini NQ -2.7%. However, the selling was not a one-day story; E-mini S&P and E-mini NQ futures finished the week -at 4.3% and -5.9%, respectively. As the week unfolded, we pointed to the selling, in part, front-running fears of a weak Nonfarm Payrolls report, especially after Thursday’s ADP. One might wonder why Friday was so ugly if this were the case. Well, with the fallout from Sunday, August 4th, still fresh in everyone’s mind, we believe the risk appetite was nonexistent, and a buyer’s strike persisted.
After the closing bell Friday, price action slipped further with the E-mini S&P hitting a low of 5394 and landing a direct hit on rare major four-star support at 5394.75-5398, aligning with the 50% retracement of the August range. This level was not retested Sunday night with a low of 5405.25, and price action has been on the mend since. Similarly, in the post-bell selling, the E-mini NQ nearly pinged its .618 retracement of the August range at 18,372. A clear floor is now defined here, and the bulls do not want to see a retest. Ahead of the opening bell both E-mini S&P and E-mini NQ futures are up more than 0.5%. It will be critical for both indices to battle out above our Pivot and point of balance in order to usher positive momentum in the E-mini S&P at 5444 and the E-mini NQ at…
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