Has it begun?📉 - Thursday Brief

Hey team!

Hope you’re all doing well and managing to find some good setups this week.

Another juicy trading brief for you on this fine Thursday.

Let’s dive in…

Impact Snapshot

  • U.S. initial jobless claims fall in latest week, reflective of low layoff level

  • Phil. Fed factory gauge shows expansion for first time since August 2022

  • Earnings:

Market Evaluation

Reflecting on yesterday’s FOMC minutes meeting, Federal Reserve officials are still worried that inflation could rise again, which would necessitate more interest rate hikes.

They were also concerned that the decline of value in commercial real estate which could affect banks and other financial institutions, sending warnings throughout the economy.

In Asia, Japan's Nikkei ended just above a 21/2-month low, while China stocks closed marginally higher.

Despite a remarkable rally in stock markets so far this year, concerns have been growing over the potential ripple effect of a prolonged slowdown in the world’s second-largest economy.

Beijing has acknowledged its immediate economic headwinds and signaled more fiscal policy support.

The weakness in China isn’t contained to the region. European companies with ties to China face risks too. European shares slipped as downbeat earnings and BAE Systems weighed.

Global government bond yields extended their climb, with the US 30 year reaching the highest point since 2011 and other benchmarks returning to 2008 levels as resilient economic data challenges the view that central banks rates are peaking.

Overall, the bottom line of yesterday’s FOMC minutes meeting, is that the fight against inflation isn’t over. And there’s a risk interest rates have to go higher.

Markets Breakdown

Yesterday’s session showed aggressive selling continuation. 

After the NY open, buyers were present and tried to reclaim the key zone of 4458 which we were looking for the bullish scenario but failed.

Failure to reclaim 4458 as support lead to aggressive selling activity with the bears pushing the prices in both the downside levels we were watching for the day at 4439/4426.

We’ve posted the bearish scenario on Twitter on the ON session which was a textbook follow up of what the consequences were for the bulls if they didn’t reclaim 4458, read it Here.

In today’s session for ES, the NY open filled the overnight gap which saw bulls trying to push the prices higher but failed.

The overnight plan remains true as the first pullback zone was the key pivot we’ve posted which we must hold as support for an attempt to reach the higher zones.

Failure to hold above 4417 will lead to continuation of the aggressive selling taking place.

Read the dedicated Overnight session post here

ES

The targets we look for until NY close & Targets to pay attention Tomorrow:

  • Main pivot: 4417

  • Upside Levels: 4443/4454/4470

  • Downside Levels: 4398/4389/4370

That wraps up today’s report. If you found value in here, we kindly ask that you refer our Substack to a friend. Oh and you’ll be rewarded for it which is always fun!

We’ll see you all in our big Sunday brief.

Until then, have a fantastic rest of your week!

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Disclaimer: Futures and options trading carries a significant level of risk and may lead to substantial financial losses. The content provided in this newsletter is solely for informational purposes and should not be construed as a trade recommendation or financial advice. It is essential for readers to independently assess and make their own investment decisions, taking into consideration their personal financial situation and risk tolerance.