Pre-Market Outlook – 6/4/2021

The market reacted positively to the April employment report released this morning, showing the unemployment rate dropping to 5.8%. As you know, I don’t typically day trade on Friday.

The Employment report got prices well above yesterday’s high. Still, we have now come back into range. We also have overnight inventory that is relatively balanced with an almost equal distribution of time spent on either side of settlement.

Even if there is a small true gap higher by the time the bell rings, we would still be well within the larger balance area where there is a lot of value range if you look to the last week of the market action. For these reasons, better trades are likely to develop later rather than earlier today.

The second thing to note is that I would only focus on two fundamental levels today – the overnight high at 4210.25 and yesterday’s low at 4165.25. On the NASDAQ 100, find the equivalent levels, keeping in mind that the index already bounced from the WEM low yesterday.

It is likely that anything between these levels is simply going to be responsive trade that doesn’t bring about any meaningful change.

Change is an important word. Trading is all about anticipating change and trying to either get ahead of it or get aboard.

The market is looking for a catalyst in my view, and when that arrives we will see the picture more clearly.

Chop, chop – is the buzzword for today.

A.F. Thornton