A Quick Check on Intraday Intermarket Structure after the Friday Jobs Report
Market participants can’t say the “worse than expected” Non-Farm Payrolls (Jobs) Report was a complete surprise, given that the tide of economic news recently turned sharply negative (or at least has been hitting consistently under expectations).
With Friday’s “Jobs Report” also worse than expected, let’s take a quick pre-market look at the current intraday intermarket structure to see what to watch as the session progresses.
(Click for larger size image)
The biggest fact most traders will be watching is how the S&P 500 holds the absolutely critical Bull/Bear Battle Zone at 1,300 (see “May 31 Stock Market Check” for additional levels beyond the S&P 500).
There are likely to be a cluster of stop-loss orders (from the buyers/bulls) that trigger under the 1,300 level – it will be up to buyers to defend this level and overcome the “spooked selling” that is likely to come should 1,300 break.
Oil is following stocks, as it broke its trendline from the last two sessions (the ‘rally bounce’ after June 1st’s plunge). Oil turns bearish under $100 – namely under $99 which is where it is also opening.
Gold appears to be benefiting from the “panic” or down-turn in the US Economic Situation, as it rallied while stocks and oil ‘collapsed’ on June 1st, only to shake violently to the downside yesterday. At the moment, gold has turned very bullish just ahead of the open – breaking the declining trendline with a price surge.
And finally, the US Dollar Index is threatening another intraday reversal to the upside, after breaking the dominant short-term trendline June 1st and then now it is gently breaking the two-day trendline on the Jobs Report news.
Keep these intraday structures in mind, as well as the key higher timeframe levels in each of these markets as you trade this interesting Friday session.
Corey Rosenbloom, CMT
Afraid to Trade.com
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nice post as usual Corey. Gap is getting filled this AM and we have positive momentum divergence on the 60 min (comparing price and momentum lows of May 23rd) with price and momentum lows of today)… so positive AND tick divergence (on 30 min, tick has been registering higher highs for the past three days) into the 1300 pivot, maybe is telling us that the 1300 will likely hold… with the QE2 thesis still in play, the odds probably increase for the 1300 holding.. anyway, back to trading. 🙂 thanks again for this post.
Cheers Corey,
Where do u see gold going over the summer months?
Will a downturn in the s&p be bullish for gold?
Excellent question – I think a large part of gold's summer trend has to do with two linked factors – the debate on the USA Debt Ceiling limit (it fails, gold likely rallies) and whether the Federal Reserve extends QE2 or embarks on QE3 – or if the markets start to anticipate they will do so. That's fundamental reasons – chart reasons suggest trend continuity unless we objectively break rising support moving averages (namely the 20 week EMA) which hasn't happened really since 2009. Of course, a little chat box can't answer such a big question as that 🙂
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