Three things before Monday.
The flush Wednesday’s note expected came on Thursday. ES broke the week’s low, traded 7,672.75 at 11 a.m. Eastern, closed 7,725 and kept going. Friday’s payrolls printed 29,000 jobs against about 90,000 expected, unemployment held 4.2%, and ES ran 137 pts off Thursday’s low before settling the week at 7,776.50.
October’s hike is mostly gone from the price. The odds were near 70% on Monday and closed the week under 20%. December is still priced as likely, and the 10-year touched 5.34% Thursday, a 24-year high, before easing to about 5.28%.
Underneath, it’s still 2 markets. Nasdaq futures made a contract high Friday and rose 0.4% on the week. The Dow lost 1.3%. The equal-weight S&P 500 posted its 7th straight weekly loss. Citadel Securities’ October note put the gap in one number: 4 stocks made more than 200% of the S&P’s third-quarter gain, and the rest of the index subtracted.
We’ve seen this week’s shape 51 times since 2020: a week that undercuts the prior week’s low and closes near the top of its own range. The next week traded above this week’s high 88% of the time, against 64% for any week. The usual dip first ran about 0.9%, which lands right where the buy sits.
The plan: long, half size, the starter from Thursday’s buy still on. Buy the dip into the map, take the first target on the way up. One close takes it away, and it’s in the levels.
Below: last week on the map, the score, the levels, the last 30 days, the plan, the crowd, the leaders and the week.
