E-Mini S&P 500 Futures
The fat finger sell-off on Thursday makes it a little difficult to identify scenarios for Friday since the market didn't truly auction below 1106. I'm expecting prior support areas to act as Resistance on the way back up, and will be looking to sell those areas on first touch. The on-going theme is still to sell the rallies. I'm cautious on the Long side, but am expecting strong bounces since today's selling definitely put the market in a short-term over-sold condition; and will take Long setups as well. Although the market focus is on the European debt crisis, and today's sell-off, the Friday employment report could still act as a market catalyst. I usually use a 2 point max stop-loss on my trades, but will have to use slightly wider stops due to the spike in volatility. At the same time, I'll be looking to get more gains out of each trade. I'm expecting consolidation in a wide range in the coming days (horizontal development), while the market digests the recent selling activity. To play it safe, be aware of the momentum, and wait for momentum to stall at the Support/Resistance Areas before entering a trade. You may miss the best trade location by waiting a little, but what you give up in location will be made up by a higher probability of a winning trade. Waiting for momentum to stall could also keep you out of the losing trades.
Econ Data
Employment Situation (non-farm payrolls) at 7:30 AM (CT) and Consumer Credit at 2:00 PM (CT).
ES - Daily Chart with Volume Profile and Key Levels