Good day!
Prior to the market opening the ADP labor report came in and showed job losses better than expected. The productivity numbers also came in looking good. And Oil was down again, the market couldn't handle all that good news and started to sell off immediately and continued. The move exacerbated late in the day when a Fed President said the GDP was not going to be very good and Bill Gross said he is standing aside until conditions are more favorable.
The QQQQ had its third trend day in a row and I haven't seen that in a long time. Thursday gave us an exhaustion move down. That means big bar with big volume and usually that is a trend day. The QQQQ is back to the daily lows and weekly triangle support area. The DIA/SPY found support at previous daily lows which we can see on the charts. On the 60 min charts we can see that DIA and the SPY reached the equal move support area. Generally all reached support areas but still have room for morning weakness which can manifest itself with gap down or selling pressure in the morning.
Thursday close at lows suggest that odds for that scenario. The monthly job numbers come out and hour before the open and that makes the odds even greater. Since indices are extended on the intraday charts and they reached the daily support areas (QQQQ daily CCI is -233 which mean oversold area) it will very risky to take a new short trade longer than a scalp. We had several great swing trades and several open trades and I will follow their action and my focus will be on possible reversal. My trading will wait for a reversal or nothing for new setups. I will expect a reversal but only for day trade purposes. I will talk more about weekly charts on the weekend commentary. This week move down could be a trigger for a new weekly/monthly selling wave.
Wish you all good trading!
Ivica Juracic
