All eyes on data

Yesterday
We continued trading in a narrow range yesterday after we failed to take out the 992 support range. I have to admit I was a bit surprised at this action here and would have expected at least a marginal new low but that did not happen.

As the market turned around it was clear we had to brace ourselves for a bit more upside. Usually I am pretty accurate with price points and levels but yesterday was one of those one-hit-wonders.

At 12:59PM I had posted the following in the comments section:

"100.77 on SPY is as high as it can go, even if it breaks out to the upside on that triangle. Not higher. Putting my foot down !!!!! Now market you listen to me and do what I say ...."

Well I guess the market listened, high of the day right at the close was 100.77. A bit lucky I would say but also inline with my other comment around 11:47AM.

"Based on what I am seeing here, sustained rallies above 1000 are very unlikly. I would not be surprised to see one last push up to 1003-1004 and then fall very strong."

Well we got that one too, HOWEVER, this happened into the close which makes all of this a very bullish scenario. Considering that we closed above the open price this pattern looks very much like a bullish reversal pattern.

Today
Well the morning at 8:30 will decide the day. We have to accept the possibilities of a trend day today, I know any rally in the past 2 weeks had been sold into, BUT for today, if we get good job numbers I expect a minimum of 8-10 point gap with a stepping day closing at the highs or with a marginal sell off into the close above the open price.

The other scenario of course a GAP towards 998 or more with continued selling and possibly reaching 980 with a marginal breach towards 978.

Position Update
I had positioned myself last week through what I consider my max pain zone to profit from this move that happened this week. My price and time targets are still at a minimum 960 by OPEX, however, due to the premium drop in all my puts my max pain zone has dropped into the 1010 range (1019 before). Thats a whopping 9 points of additional pain I have to assume - not something I am prepared to do.

FYI I have not taken a single profit on my positions yet (hindsight is 20/20 but when it comes to options, its always tempting to close out before your time/price targets)

So it will become quite difficult for me to manage my positions here. I have to accept a rally towards the 1012 range, possibly even ranging to 1016. This is the max pain zone based on my positions, however, purely market based this is still a bearish pattern all the way until 1021.

So as a result I need to do some extra work to make my positions work. I have not yet decided how I want to play this protection. Either through a large in the money call for the intraday protection or a large futures long position via NQ to offset both the loss on ES and the puts.

More updates to come at 8:31AM lol

5:32AM: ok futures being pushed with a high of 1007 (just at my 1008 range SPX). Could be adding a nice buffer here on the upside for a potential drop on unemployment data. Combined with the option trickery (whether it was valid or not) it has all the makings to protect big money for downturn. Also interesting to note that EURUSD is not confirming this move here, it did not confirm the mid day rally yesterday (made lower highs and lower lows) and not confirming the push here on futures. If the data is positive and I were out to screw market participants I would run the long stops by dropping futures to make bears happy (and screw them with good news) and to make dip buyers chase higher and higher prices with the hope of going even higher. Ok enough of this conspiracy talk - the market does what it does and is not out to get anyone here. Whatever your position is (short for me) I can always dream up a case when the market moves against me to justify staying in the positions.