Sellers Make Late Claim

Traders hadn’t forgotten the events of last week and were quick to sell their positions in the face of tomorrow’s NFP data. 

Today’s close in the S&P left a bearish inverse doji (gravestone doji), marking supply above 1,950. Bears will feel confident heading into tomorrow’s data, assuming Thursday’s 1,975 high is not breached. The downside target is a retest of 1,867. A move higher will set up a challenge of 2,044.

The Nasdaq had a quieter day. It didn’t suffer the same wide range as the S&P, but today’s close finished with a bearish ‘cloud cover’ over yesterday’s trading. Shorts will be liking the risk:reward for a retest of 4,292 with NFP data to come.

The Russell 2000 experienced an inverse doji. The 5% MA band to the 200-day MA is playing as an unlikely resistance level, but another run to 1,103 looks on the cards. Of the indices, it continues to map a relative advantage against S&P and Nasdaq.

Look for a quiet run into the NFP data, but there is plenty of room for maneuver once the data comes out. Shorts have the advantage given the proximity of resistance, but if NFP data is favourable it will set up a big short covering rally.