Here’s how September has been to any equity bears out there so far:
Bear Life from r/wallstreetbets
Let’s take a look at the past 24 hours. First, there was the explosive rally based on the news that talks were on again between the U.S. and China (red rectangle). Interestingly, almost this entire move was erased overnight, but by the opening bell, it was largely restored. At that point, once the regular market was open, there was another explosion in prices (blue rectangle) as if nobody else had received the memo. A late-day fade let prices slip to pretty much where they were during the first surge.
Taking a big step back, you can see that prices are mashed up precisely against the trendline. The ideal technical setup would be a retreat from this trendline based on the release of the jobs report Friday morning. If, instead, the ES pushes above this trendline, then it loses its role as resistance, and new lifetime highs are on the horizon.
The NQ is somewhat of a different setup. It has been stronger, so although it did some damage to the Christmas Trendline, it never really below it, and it certainly isn’t beneath it now. On the contrary, there’s just a tiny amount of overhead supply holding the NQ back from record highs.
As a side note, bonds (shown below via symbol ZB over the past few years) are still bullishly configured, although there’s plenty of room to the downside without breaking this bullish setup.
For myself, Thursday stunk. I was down 3% on the day, and I rapidly retreated from 157% exposed down to a mere 50% (!!!!!!!!) and then built that up cautiously to 85%. Thus, going into Friday morning, I am far less short than I was (which I guess amps up the chances substantially of a complete washout).
The jobs report comes out an hour before the opening bell, and ol’ Jerry Powell has a speech, entitled “Economic Outlook and Monetary Policy“, which I believe is the title of every single speech the son of a bitch has ever given in his entire life.
