The daily brief is a free glimpse into the prevailing fundamental and technical drivers of U.S. equity market products. Join the 850+ that read this report daily, below!
Fundamental
Hey team – your letter writer is a tad rushed, today! Therefore, expect a shorter letter today and more in-depth letters next week. Thanks!
I refer you to the September 1 letter [HERE] for depth into some fundamental market contexts, the August 30 letter [HERE] for a recap of big trades we structured, as well as the reasons we had to take them off, which we dissected a bit on August 31 [HERE] and September 1 [HERE].
Next week, we’ll likely go through a case study to understand what went right and wrong, as well as what could have been done better.
For today, the big item to watch for is the US jobs report. This may “tip the scales toward a third jumbo-sized Federal Reserve hike in interest rates later this month,” according to Bloomberg.
The consensus number is a 298,000 gain in August payrolls and steady 3.5% unemployment.
With that, Chris Zaccarelli of Independent Advisor Alliance explained that “a strong jobs report will be a reason for a market selloff on Friday.” If worse, markets may do the opposite.
Technical
As of 8:00 AM ET, Friday’s regular session (9:30 AM – 4:00 PM ET), in the S&P 500, is likely to open in the middle part of a balanced overnight inventory, just inside of prior-range and -value, suggesting a limited potential for immediate directional opportunity.
In the best case, the S&P 500 trades higher.
Any activity above the $3,987.00 VPOC puts into play the $4,018.75 HVNode. Initiative trade beyond the HVNode could reach as high as the $4,064.00 RTH High and $4,107.00 VPOC, or higher.
In the worst case, the S&P 500 trades lower.
Any activity below the $3,987.00 VPOC puts into play the $3,943.25 HVNode. Initiative trade beyond the HVNode could reach as low as the $3,909.25 MCPOC and $3,867.25 LVNode, or lower.
Click here to load today’s key levels into the web-based TradingView charting platform. Note that all levels are derived using the 65-minute timeframe. New links are produced, daily.
Definitions
Volume Areas: A structurally sound market will build on areas of high volume (HVNodes). Should the market trend for long periods of time, it will lack sound structure, identified as low volume areas (LVNodes). LVNodes denote directional conviction and ought to offer support on any test.
If participants were to auction and find acceptance into areas of prior low volume (LVNodes), then future discovery ought to be volatile and quick as participants look to HVNodes for favorable entry or exit.
POCs: POCs are valuable as they denote areas where two-sided trade was most prevalent in a prior day session. Participants will respond to future tests of value as they offer favorable entry and exit.
MCPOCs: POCs are valuable as they denote areas where two-sided trade was most prevalent over numerous day sessions. Participants will respond to future tests of value as they offer favorable entry and exit.
About
After years of self-education, strategy development, mentorship, and trial-and-error, Renato Leonard Capelj began trading full-time and founded Physik Invest to detail his methods, research, and performance in the markets.
Capelj also develops insights around impactful options market dynamics at SpotGamma and is a Benzinga reporter.
Some of his works include conversations with ARK Invest’s Catherine Wood, investors Kevin O’Leary and John Chambers, FTX’s Sam Bankman-Fried, ex-Bridgewater Associate Andy Constan, Kai Volatility’s Cem Karsan, The Ambrus Group’s Kris Sidial, among many others.
Disclaimer
In no way should the materials herein be construed as advice. Derivatives carry a substantial risk of loss. All content is for informational purposes only.
