End of Day Post

The markets closed slightly higher, but well off of intra-day highs. The markets were hesitant as we move into the Non-Farm Payrolls data tomorrow morning at 8:30 am ET. A slight miss on the payrolls might be just what the doctor ordered. It would signal that the Fed would be less likely to hike rates at the upcoming meeting. However, it also wouldn't be a terrible number for the economy as a whole. With a much better or worse number than expected, the markets may not like that quite as much. Of course, price action will be the deciding vote.

The broad markets seems indecisive at these levels. The long-term trends have been broken to the downside. The short-term trends were over-extended on the downside (way below moving averages) and are starting to work off that oversold condition. In fact, broad markets have established higher swing lows this week. Most often, this will end up resolving in the direction of the longer-term (weekly chart) trend. In this case, that would mean at least one more leg lower toward prior lows. If the short-term rally starts to fail, then the risk-reward would be favorable to adding some bearish trades.

Mid-Week Outlook:

• Bull: 17%
• Sideways: 27%
• Bear: 56%

Have a great night,

Maverick Trading