The S&P 500 futures (CME: ES) went into a frenzy in the Friday session, showcasing a whirlwind of surprises and unforeseen twists, with the Non-Farm Payroll (NFP) report delivering an electrifying upside surprise. Initially, the bulls cheered triumphantly, painting the charts in a sea of green. However, the bulls stealthily emerged from hibernation, throwing a curveball at the market euphoria. 

The NFP number came in at 339K, surging past the 190K expectation from the prior 294K. However, upon closer inspection, unemployment ticked up to 3.7% from the prior 3.4%, while average hourly earnings slid to 4.3% from the previous 4.4%. Although the data was mixed, opportunity often hides within the chaos, with the S&P 500 futures being no exception as the trading week comes to an end. 

Technical 

The futures on the 1D chart look vulnerable, trading close to a rising wedge resistance at 4,252.5 (R1). However, with the bulls finding momentum immediately after the release, a breakthrough at R1 could entice an additional leg up toward 4,277.00 (R1) to trigger an intraday rally. Resistance at 4,314.25 (R3) could then come into play as the final hurdle to the bulls looking toward 4,327.25. 

However, if the rising wedge resistance holds sustainably, the intraday reversal back to the daily pivot support of 4,215.25 is likely. A bearish breakdown at this level could bring the focus back to support at 4,190.75 (S1) for a continuation within the rising wedge formation. If the rising wedge gets broken down, the bears could look toward 4,109.25 and 4,055.25 in the longer term. 

Summary 

The Non-Farm Payroll report came as a surprise to many, and the directional price action is likely to be driven by the sentiment toward the Federal Reserve’s monetary policy stance. If the futures sustainably break through the 4,252.5 resistance, further upside toward 4,277.00 and 4,314.25 seems close to reach. 

Sources: Koyfin, Tradingview, Reuters