Flow SPX Daily: May 7 Analysis & May 8 Plan
Claims 200,000. SPX Digested Wednesday’s 105-Point Gain. Jobs Day Tomorrow.
Market Summary: Thursday May 7
SPX Close: $7,337.10 | Change: -$28.01 (-0.38%)**
SPX Open: $7,376.78 | Intraday High: $7,385.02 | Intraday Low: $7,321.25
Volume Profile: Opened 7,376, immediate high of 7,385 in the first few minutes, sold steadily to 7,321 afternoon low, bounced to close 7,337
VIX Close: 16.85 | VIX Range: 16.85 low (close) – 17.60 high
VIX Premarket: 17.53 open, moved lower into the open
VIX Regular Session: Opened 17.33, oscillated 17.08–17.60 throughout the day, then compressed to 16.85 at the close
VIX Levels:
Normal: 14–16 (VIX closed at 16.85, 0.85 points above the normal range ceiling, the lowest closing print of the entire correction and recovery cycle)
Elevated: 18–20
Fear: 20–25
Panic: 25+
VIX at 16.85 is the lowest close of the correction cycle, edging below Wednesday’s prior cycle low close. The close at the session low, with VIX spending most of the day oscillating between 17.08 and 17.60 before compressing to 16.85 in the final minutes, is the same dynamic seen at prior compression milestones: the final-hour vol sellers driving VIX to the day’s low at the close. VIX is 0.85 points from the normal range. A close below 16 on Friday would formally place VIX in normal territory for the first time since the correction began back in late February.
A market where VIX closes at its lowest level of a correction while SPX is 335 points above the prior ATH and 24 hours from a potentially weak jobs report is a market pricing near-normal risk. The systematic buyers are fully engaged.
Price Action Narrative
The session opened at 7,376, set the ATH extension high of 7,385 immediately, and then spent the entire session working lower. The selloff from 7,385 to 7,321 is 64 points, a meaningful intraday decline but entirely contained within Wednesday’s single-session +105 gain. The close at 7,337 is 43 points above Wednesday’s gap-up open of 7,294. The week’s gain from Monday’s close of 7,200 to Thursday’s close of 7,337 is 137 points, one of the largest four-session advances of the entire recovery.
The $7,300 wall at $144M continues to hold. The close at 7,337 is between the $7,300 and $7,350 support levels. The afternoon low of 7,321 did not breach $7,300, confirming the wall is doing its mechanical work.
Forecast Review: What We Called Wednesday
Wednesday’s forecast: 45% claims constructive, extend toward $7,400–$7,450. 40% claims normalized, consolidation 7,310–7,400. 15% claims spike, pullback to $7,250–7,300.
Economic data actuals:
Initial jobless claims week of May 2: 200,000 actual vs 206,000 forecast vs 190,000 prior: beat
US productivity Q1: +0.8% actual vs +1.1% forecast vs +1.6% prior: miss
Construction spending February delayed: -0.2% actual vs +0.1% forecast: miss
Construction spending March: +0.6% actual vs +0.3% forecast: beat
Consumer credit March: not yet reported at publication time
What actually happened:
SPX opened at 7,376.78, moved higher to the session high of 7,385.02 in the first few minutes, then sold off through the morning to a low of 7,321.25 in the afternoon, before bouncing to close at 7,337.10. VIX opened premarket at 17.53, moved lower to open regular trading at 17.33, hit a low of 17.08, moved higher to 17.58, rejected lower, based between 17.19 and 17.60 the rest of the session, then dropped to a low of 16.85 at the close.
Scorecard:
45% scenario: No extension toward $7,400. The session opened above $7,376 but immediately sold.
40% scenario: Consolidation best describes the session. The close at 7,337 is within the 7,310–7,400 range.
15% scenario: No spike above 220,000. Claims at 200,000 was a beat.
The 40% consolidation scenario was right. Claims at 200,000, six below the 206,000 forecast and the third consecutive below-expectation reading, provided further labor market constructiveness heading into Friday’s payrolls. But the session opened at Wednesday’s ATH extension levels and sold steadily through the day. The close at 7,337 is a digestion session, not a breakdown.
