Directional Bias For The Day:

• S&P Futures are higher at 8:30 AM; the September future jumped higher and broke above a Horizontal Channel following the NFP report at 8:30 AM – 100% extension target of the channel near 3994.25 is achieved, and the 161.8% extension target is near 4006.50
• The odds are for an up day with elevated volatility – watch for a break below 3965.25 for a change of sentiments
• The key economic data report due during the day:
  • Non-Farm Employment Change ( 315K vs. 295K est.; prev. 526K ) at 8:30 AM
  • Average Hourly Earnings ( 0.3% vs. 0.4% est.; prev. 0.5%) at 8:30 AM
  • Unemployment Rate ( 3.7% vs. 3.5% est.; prev. 3.5%) at 8:30 AM
  • Factory Orders ( 0.2% est.; prev. 2.0% ) at 10:00 AM

Directional Bias Before Open:

Key Levels:

• Critical support levels for S&P 500 are 3970.23, 3938.85, and 3921.92
• Critical resistance levels for S&P 500 are 3995.46, 4015.37, and 4044.98
• Key levels for E-mini futures: break above 3999.50, the high at 8:30 AM and a break below 3965.25, the low at 8:30 AM

Pre-Open

• On Thursday at 4:00 PM, S&P futures (September 2022) closed at 3967.50, and the index closed at 3966.85 – a spread of about +0.75 points; the futures closed at 3968.75; the fair value is -0.75
• Pre-NYSE session open, futures are higher – at 8:30 AM, S&P 500 futures were up by +18.75, Dow by +130, and NASDAQ by +58.75

Markets Around The World

• Markets in the East closed mostly lower –  Shanghai and Mumbai closed up
• European markets are higher
• Currencies (Compared to two weeks ago):

• Commodities (Compared to two weeks ago):
  • Energy futures are mixed
  • Precious metals are lower
  • Industrial metals are lower
  • Soft commodities are mixed
• Treasuries (Compared to two weeks ago)
  • The 10-year yield closed at 3.265%, up +38.5 basis points from two weeks ago;
  • The 30-year is at 3.374%, up +23.5 basis points;
  • The 2-year yield is at 3.516%, up +23.7 basis points;
  • The 10-Year-&-2-Year spread is at -0.251, up from -0.399
  • The 30-Year-&-10-Year spread is at 0.109, down from 0.259
• VIX
  • At 25.31 @ 7:45 AM; down from the last close; below the 5-day SMA;
  • Recent high = 29.06 on July 13; low = 21.77 on August 25
  • Sentiment: Risk-On

The trend and patterns in various time frames for S&P 500:

Previous Session

Major U.S. indices closed higher on Thursday, September 1, in mixed volume. The major indices gapped down at the open and then declined more. They turned around in the late morning and then climbed higher near the close. The Dow Jones Industrial Average and the Dow Jones Transportation Average traded in lower volume.

From Briefing.com:

[…] The sentiment shift was fueled by price action in the S&P 500, which tested its 3,900 level at the intraday low, found support there, and pushed into positive territory by the close. The bounce was driven by a rebound in the mega cap stocks. The Vanguard Mega Cap Growth ETF (MGK), down as much as 1.9% in the morning trade, ended the day up 0.2%. […] At midday, decliners led advancers by a nearly 6-to-1 margin at the NYSE and a greater than 3-to-1 margin at the Nasdaq. […] Decliners led advancers by a 5-to-2 margin at the NYSE and a 5-to-3 margin at the Nasdaq. The S&P 500 sectors were led by utilities (+1.4%) and health care (+1.7%), reflecting the continued risk-off mentality. Energy (-2.3%), materials (-1.4%), and information technology (-0.5%) were the lone laggards in negative territory. […] Treasury yields settled near session highs with the 2-yr note yield pushing above 3.50%, up eight basis points to 3.52%. The 10-yr note yield rose 13 basis points to 3.27%. […] The August ISM Manufacturing Index was unchanged from July at 52.8% (Briefing.com consensus 52.0%), yet that was stronger than expected. A number above 50.0% is indicative of expansion. August marked the 27th consecutive month of expansion in the manufacturing sector, although the July and August readings were the lowest since June 2020. […] The IHS Markit Manufacturing PMI rose to 51.5 in the final reading for August from 51.3 in the preliminary reading. July’s final reading was 52.2. Initial claims for the week ending August 27 decreased by 5,000 to 232,000 (Briefing.com consensus 250,000) while continuing jobless claims for the week ending August 20 increased by 26,000 to 1.438 million. There were downward revisions for initial claims and continuing claims in the prior week, too. […] Q2 productivity decreased 4.1% (Briefing.com consensus -4.6%) with the revised report while unit labor costs increased 10.2% (Briefing.com consensus 10.7%) versus a 10.8% increase seen in the advance report. […] Total construction spending declined 0.4% month-over-month in July (Briefing.com consensus -0.1%) following an upwardly revised 0.5% decline (from -1.1%) in June. Total private construction was down 0.8% month-over-month while total public construction increased 1.5%. On a year-over-year basis, total construction spending was up 8.5%.] […] Weekly natural gas inventories increased by 61 bcf after increasing by 60 bcf during the previous week. Dow Jones Industrial Average: -12.9% YTD S&P 400: -15.6% YTD S&P 500: -16.8% YTD Russell 2000: -18.2% YTD Nasdaq Composite: -24.7% YTD Overseas:  Europe: DAX -1.6%, FTSE -1.9%, CAC -1.5% Asia: Nikkei -1.5%, Hang Seng -1.8%, Shanghai -0.5% Commodities:  Crude Oil -2.96 @ 86.45 Nat Gas +0.10 @ 9.23 Gold -19.60 @ 1706.60 Silver -0.25 @ 17.66 Copper -0.11 @ 3.41