The task now is to confirm the intermediate low when it is firmly planted, and then we can take the next cycle from there. The price has met the minimum 20-week objective, so the question now is will that be enough.

I am always suspicious of news-driven sell-offs like yesterday, which are more akin to liquidation breaks than fundamental declines. It is a bit more complicated when a liquidation break happens in the middle of a correction already underway.

Since the NASDAQ 100 led us down, it should be the first index to confirm a low. I will be watching that carefully in the next few sessions.

Today’s Day Trading

I don’t typically day-trade on Fridays due to the complications provided by weekly options expiration. However, respecting the S&P 500 index, the Weekly Expected Move high and low are way out of bounds today, so they are unlikely to influence the market. 

The employment numbers for February were better than expected, at 379,000 versus the consensus at 175,000. Remember, there is a sea change at hand. Good economic news is now bad news for the markets because it could mean more inflation, higher interest rates, and a potentially unfriendly Federal Reserve soon. 

Yesterday’s regular session represented a breakdown from balance. The low end of the previous balance area had been about 3805. Acceptance above this area puts yesterday’s breakdown into question and has the potential to reverse the current negative tone as more buyers join a rally.

If the open is faded and there is no further advance into the balance area above 3805, then the bears likely retain control for now. Other key levels are the overnight high at 3782.50, settlement at 3772.25, and the overnight low at 3720.25. Look for the reaction at these levels, and monitor for continuation as the market breaks them either higher or lower, as the case may be.

A.F. Thornton