What Happened? - 

• ADP data came in and the market tested over 400 in premarket. It opened up nice and bullish and then fell to pieces. A slow grind down all day say SPY break 396 and close just above 395. 

What to Expect on this Week (all times are EST)?

• Thursday - No major events to me
• Friday - Major Jobs Data at 8:30am - This was the market moving event, but with the current drop, I am not sure now. 

Current Positions and Plays:

• I entered SPX calls at 401, sold them for a loss and grabbed some more SPX calls at 396. Not a good day for me. 

What Do I Think?

• SPY Technicals - We are oversold on the 1 hour chart and 4 hour chart. The 30 min chart is just above oversold and daily is neutral. 
• SPY Fibs for ATH to 2022 low - 407 is the .382 and 390 is the .236. 
• SPY Fibs for COVID low to ATH - 380 is the .382.
• SPY broke the 396 level. Looking for consolidation and a possible bounce here or at 393. 

Why Will the Market Go Up?

• I think the only thing the bulls have in their favor here are the oversold technicals on the charts. You also need to keep an eye on Oil and the DXY. If those start to fall, then the bulls will get a shot in the arm from tech recovering. 

Why Will the Market Go Down?

• The economy keeps reporting strong data numbers and that is making it very clear that the Fed is not done tightening this market. So with no Fed relief in sight, this is pretty much fade any rip that comes. We have seen it all week so far, and I am not sure there is any data this week that can prevent that. The DXY keeps surging on the international data and if it breaks that 109.20 resistance, the bears will be feasting more on the bulls.

THE PLAYS OF THE DAY for THURSDAY for SPY:

• Scenario 1: If we test under 393 tomorrow, I will look at grabbing a few more calls to average down on my position. This is a matter of when not if we bounce now. If that test happens in the morning, and we do get a nice bounce back near 400. I will close out and enter the strangle play for Friday's jobs data. I will look at doing a one or two point out of the money on both sides.  
• Scenario 2: We test 393 and just keep falling to 390: I would have to again consider entering calls here with a few weeks out given the oversold conditions. 
• Scenario 3: We chop all day but hold near 396. I think I would just hold my call position and take the punch in the face. 
• NOTE: I am turning into a swing trader for various reasons, so please keep that in mind moving forward. My options plays will be always a few weeks out because of this. 
• This is not financial advice

Levels I am Watching

• $SPY - levels 390 > 393 > 396 > 400 > 404.40 > 408
• $QQQ - levels 290 > 293 > 296 > 300 > 302 > 308 > 313