Friday’s Nonfarm Payroll Report was certainly headline-strong, with 216,000 jobs created in December versus 170,000 expected, states Bill Baruch of BlueLineFutures.com.

Notably, November’s read was revised lower by 26,000 jobs and there were 443,000 worth of lower revisions in 2023. However, it was not the job creation that anchored a headline-strong report, Wages grew by +0.4% m/m, versus +0.3% expected and +4.1% m/m, versus +3.9%. Additionally, the Participation Rate fell from 6.28% to 6.25%, and the Unemployment Rate was steady at 3.7% when analysts saw it rising to 3.8%.

Diving into the data, the U-6 Rate, highlighting the underemployed, rose to 7.1%. Multiple jobholders hit an all-time high at 8.56 million, and part-time workers rose to 762,000 (@zerohedge). This erosion was echoed within the ISM Non-Manufacturing Report released shortly after, coming in at 50.6 versus 52.6, narrowly missing a contraction. However, Employment surprised at 43.3, versus 51.0, with the lowest read since April 2020.

What matters is how the Treasury complex reacted, and after digesting both reports, according to the CME’s FedWatch Tool, Fed Fund futures signal a 63.8% probability the Fed cuts by at least 25 bps in March, down from 68.1%. Also, expectations for six cuts in 2024 softened a bit.

NY Fed one-year Inflation Expectations are due at 10:00 am CT.

E-mini S&P (March) / E-mini NQ (March)

S&P, last week’s close: Settled at 4734.75, up 5.25 on Friday and down 85.25 on the week

NQ, last week’s close: Settled at 16,460.25, up 15.25 on Friday and down 563.25 on the week

E-mini S&P and E-mini NQ futures erased the December 13 FOMC reaction in the year's first week. After the post-ISM rally rolled over, we must see a constructive response against Thursday’s closing range, and the Nonfarm Payrolls reaction range to start the week. Ultimately, the E-mini S&P must close out above 4760-4766.50 and 4771.75-4774 in order to invite fresh buying and trap newfound shorts. For the E-mini NQ, this begins with resistance aligning with Friday’s high at 16,544-16,584 but will be more dependent on clearing 16,719-16,737. Both indices will remain vulnerable until this is achieved.

Bias: Neutral/Bullish

Resistance: 4741.50-4745.50, 4750, 4760-4766.50, 4771.75-4774, 4787.25-4789.75, 4796.75-4797.50, 4808.25-4809

Pivot: 4734.75

Support: 4717.75-4721.75, 4697.25-4702, 4682.50-4688.50, 4651-4657.75, 4614.25, 4600-4606.25, 4583.75

NQ (March)

Resistance: 16,494-16,519, 16,544-16,584, 16,636-16,653, 16,719-16,737, 16,760-16,788

Pivot: 16,437-16,443

Support: 16,373-16,410, 16,280-16,306, 16,000-16,079

Crude Oil (February)

Last week’s close: Settled at 73.81, up 1.62 on Friday and up 2.16 on the week

Crude Oil futures were able to close above 73.55-73.64 but failed directly at major three-star resistance at 74.16-74.29. Today’s weakness revisits a critical area of support around the $70 mark and is highlighted below. Extended trading under 71.05-71.10 will keep the tape under pressure. Although today’s weakness is ugly, a response to the January 3rd low which aligns to create a wide major three-star support with the December 13th settlement at 69.28-69.72 could encourage the buildout of a sloppy inverse head and shoulders pattern.

Bias: Neutral

Resistance: 71.46-71.65, 71.92-72.19, 72.82, 73.17-73.30, 73.64-73.81, 74.16-74.29

Pivot: 71.05-71.10

Support: 70.06-70.49, 69.28-69.72

Gold (February) / Silver (March)

Gold, last week’s close: Settled 2049.8, down 0.2 on Friday and 22.0 on the week

Silver, last week’s close: Settled at 23.315, up 0.128 on Friday and down 0.771 on the week

Gold futures rejected a new low Friday morning after Nonfarm Payroll, and Silver traded to a higher low than Thursday. This certainly laid the groundwork for what could have been a significant reversal and was after ISM Non-Manufacturing. Still, it died out midday, and here we are this morning with Gold setting a lower low of 2% from Friday’s intraday high. While we see trend line support at 2012.5-2015, this is certainly a blow to what could have been when considering where Gold was at the end of 2023 and rallied to Friday afternoon. On a positive note, Silver has still yet to set a new low. We are looking for construction in Gold above our pivot and point of balance at 2029.2-2030.8 at minimum in order to stave off fresh selling.

Bias: Neutral

Resistance: 2038.3-2043.5, 2048.6-2049.8, 2055-2057.2, 2064.3-2071.1

Pivot: 2029.2-2030.8

Support: 2012.5-2015, 1987.9-1997.3

Silver (March)

Resistance: 23.29, 23.39, 23.48-23.56, 23.75-23.78, 23.95-23.97

Pivot: 23.15

Support: 22.97-23.04, 22.88-22.92, 22.62

Learn more about Bill Baruch at Blue Line Futures.