NonFarm Payroll October 2026 Lecture

Date: 2026-10-02

Overlapping RTH opening gaps

[00:03] We’re looking at the Non-Farm Payroll price action here. I’m on regular trading hours charts, so we can see Friday’s gap, the shadow where it shares the same space as Monday’s regular trading hours opening range gap, Thursday’s, Wednesday’s, and the larger one from Tuesday.

By having a new day opening gap, new week opening gap, and regular trading hours opening range gap template all shared on the same chart, you’ll be able to see these areas where they overlap.

[00:59] On Thursday afternoon, we came down and traded to the high of Tuesday’s regular trading hours opening range gap, came back up, and then gyrated between the consequent encroachment of Thursday’s regular trading hours opening range gap and the high of Monday’s regular trading hours opening range gap.

Then today we opened regular trading hours at 9:30 Eastern Time way up here.

[01:37] We had a lot of movement to the upside. I had already been looking for higher prices on the daily chart. If you go to June 22nd, 2026, on the December NQ contract, that daily high is 31,285 even.

That’s useful information when we go down to the lower time frames.

[02:12] Electronic trading hours, one-minute time frame. Here’s what we’re working with today.

At the 9:30 opening price, we drop down. This movement lower, I wanted to see if it could get down into this area here, even if it was ultimately going to go up, take out the higher high, and make an all-time high.

At 8:30 this morning, Non-Farm Payroll numbers were released. I want you to go back and look at what price was doing between 7:00 a.m. and 8:30.

[03:59] We anchor the fib on that low and draw up to this high.

At 8:30, price rallied up. You should not try to position yourself ahead of Non-Farm Payroll. That’s guessing and gambling. It’s better to wait about 15 or 20 minutes and then see what liquidity and other reference points are left in its wake.

[04:38] After the first bit of volatility, we want to see what price is doing.

We have this short-term high here at 8:38. That’s useful information. We take the fib and anchor it from that high up to 31,285.

[05:25] The high of that 8:38 candlestick is 31,146.75. We have this level here, which is the event horizon between this short-term high that formed after the Non-Farm Payroll release and the older June 22nd daily high.

Price retraces, then rallies once more. We were already looking for price to gravitate higher, and it tried to get there.

[06:24] If I’m going to engage with Non-Farm Payroll, I’m generally looking for some kind of reaction that pulls back into the range. I’m more comfortable doing that than positioning ahead of the number.

[07:01] A best-case scenario would be something where it takes off like this, rips lower, and comes back for the 8:30 low. It got very close to it here but did not quite deliver.

Unrealized dealing range midpoint

[07:40] Once this high forms and price begins to retrace, you can calculate a fib run from that high up to the June 22nd, 2026 daily high on the December NQ contract.

By using that old daily high as the draw, this becomes an unrealized dealing range.

[08:14] We can calculate the range using this first high and that old daily high. It doesn’t matter whether price ultimately gets all the way up there. We’re using an unrealized dealing range, so we’re predicting rather than reacting.

In this vicinity, I want to be looking for something to get short on.

[09:17] Trying to guess the immediate reaction to Non-Farm Payroll is gambling. I’ve seen many times where the data should suggest one directional reaction and the market does the opposite in stunning fashion.

[10:20] Instead, after the first move, we can capitalize on the traders chasing that move.

We have this short-term high that formed and a daily high that NQ could still draw to on the upside—the June 22nd daily high on the December contract.

[10:51] This old daily high is an anchor point. If I know this level and this short-term high, they are finite, specific arrays.

What I want to know is the midpoint of that range, because that’s my event horizon. By itself, that midpoint means nothing. Now we bring in the detail I teach about the pre-market session between 7:00 and 9:00, adjusted back to 8:30 when there is an 8:30 high-impact news event.

[11:29] We have this high and this low, and the fib is already anchored between them. That gives us this midpoint.

Then we project the standard deviations. One standard deviation delivered beautifully, but I’m not interested in an isolated level.

[12:07] Isolated levels are useless. There has to be convergence between several things I teach in terms of Smart Money Concepts to make a level viable.

We add another 0.5 to the projection. We’re moving toward the level, but we still haven’t reached the midpoint measured between the short-term high and the old daily high.

[12:40] Only after we see the retracement, price goes higher, and takes out this short-term high can we calculate that high to the old daily high and find the midpoint.

You’re also seeing a shift in market structure. Before price even gets there, we can already anticipate a deeper retracement because this new leg higher is engineering sell-side liquidity beneath it.

[13:10] Traders going long during that leg will have sell stops resting below it. Shorts from higher prices will then have willing sellers below. That’s the market efficiency paradigm.

Event-horizon level convergence

[13:46] We continue increasing the standard-deviation projection. At -2.5, the projected level converges with the midpoint of the unrealized dealing range.

[14:30] The convergence of these two levels is important. Because price ripped higher directly from the 8:30 Non-Farm Payroll release, pulled back, and then ripped higher again, I’m anticipating a deeper retracement relative to the move that began at 8:30.

[15:19] Price has essentially gone straight up. During Non-Farm Payroll that can happen, but generally it’s reasonable to anticipate a retracement going into the 9:30 opening.

This is not an everyday setup. It’s not a Silver Bullet type scenario that you should expect every session. This is a volatility-based, news-driven, occasional setup.

[15:53] If it forms, wonderful. It does not occur during every Non-Farm Payroll event.

If I’m correct about the directional draw but I refuse to position ahead of the 8:30 news, there’s no problem. I simply let the initial move deliver and then wait.

[16:24] Don’t chase it. Going long after this fast move would be chasing from my perspective. Instead, I wait for the structure I’m looking for to materialize.

A lot of traders regret missing the first move. Then, when they get the first meaningful pullback into a bullish order block, they want to participate.

[16:58] We have a small gap here with a volume imbalance—two pieces of information suggesting price could continue higher. We also still have the unfinished daily draw at 31,285.

We created this short-term high here. Until another relevant daily high appears before the all-time highs, June 22nd’s high on the December NQ contract is the draw.

[17:37] That creates the possibility of another run higher while simultaneously engineering sell-side liquidity below the new leg.

Because it’s Non-Farm Payroll and price can become unruly, I’ll sometimes leave part of the position for deeper objectives. When trading news-driven events, I may place an extreme final take-profit beyond what I realistically expect, in case price begins to expand aggressively.

[18:44] But you have to take partials along the way because Non-Farm Payroll can quickly take unrealized profit away from you.

Just because price trades to one of your levels doesn’t mean you should fall in love with the trade. You have to bank something.

[19:19] Now I’m going to draw your attention to this area and add the executions.

SIBI rejection and execution

[20:05] If the idea was going to fail, that was acceptable. I entered three contracts early here, then added three more right at the event horizon, the red line.

[20:50] Then price started to pass lower through it. I added one more because I felt strongly that the move higher was finished and price would draw lower.

This buy-side imbalance, sell-side inefficiency became important because price had traded to the event horizon and I was expecting it to draw down, at minimum, into the engineered sell-side liquidity below.

[21:52] The next candle trades up into the imbalance and fails to touch consequent encroachment.

I like that failure because it shows weakness. That’s why I sold there.

[22:25] When we’re looking for bearish order flow, the candlestick will show you everything through its open, high, low, and close. There’s no need to complicate it beyond that. It’s visual.

[23:01] If you see this as an inversion fair value gap and price fails to reach its midpoint, then trades lower on the next candle and leaves the gap behind, that is confirming.

It doesn’t matter how many people bought or sold inside the range. What matters is how the candlestick books, because that is indicative of the order flow.

[25:16] We’re looking for areas where price shows weakness. This candlestick failing to reach the midpoint of this buy-side imbalance, sell-side inefficiency while we’re bearish from the highs of the day is one example.

We’re expecting price to draw into the engineered sell-side liquidity below. Then we evaluate the distribution of the wicks, highs, lows, and where the bodies close relative to where they open.

[25:54] You can get a clear view of what price is likely to do by observing what it fails to do. That is more useful to me than indicators, total order counts, or volume around a specific price level.

[26:37] If you’re a volume profile trader, you’re already singling out time, but you’re generally looking across a broad range of time and calculating the significance of something that has already happened.

[27:05] I’m trying to predict something that is not there yet. Event horizon.

Knowing where price should fail, where it should gravitate to, and then simplifying everything through candlestick behavior is enough. In the futures market, everybody has the same high, low, opening price, and closing price. Those are the important price levels I care about.

[28:42] It does not need Commitment of Traders. It does not need SMT. I did not use SMT today or yesterday, and I did not use Commitment of Traders.

You only need a few things in your repertoire. You don’t need the entire ICT toolbox. Choose the PD Array that makes the most sense to you in the beginning.

[29:21] Stick with what you identify easily first. That doesn’t mean you’re good at trading or that you need to take a trade.

[30:02] Here I added again because we’re seeing a failure to get into the upper half. That’s what we want. We want price to stay in the lower end of the range.

If it trades into the premium side, it needs to stay there briefly and then leave, like this wick does. It approaches consequent encroachment and quickly rejects it.

[30:33] All of this is visible through open, high, low, and close on the one-minute time frame.

Then the market produces this large drop. I had another gap marked over here, but I canceled it and refined it to another one in here. It broke lower.

Same idea. Price trades up toward consequent encroachment and then leaves it.

[31:04] A stop loss above here is fine. That’s where I had mine.

The market trades into the upper quadrant, rejects it, and comes back down to the low of that candlestick’s close and the opening price of this candlestick.

That’s the entirety of the SIBI, which we want to behave as a bearish fair value gap.

[31:46] This is a sell-side imbalance, buy-side inefficiency, or SIBI, and it performs accordingly. Price trades into it and rejects.

Consequent encroachment is slightly above it, and then price comes back down.

The bodies in here represent an accumulation of shorts while the public is trying to buy, expecting the move toward all-time highs to continue.

[32:15] But we’re going into the 9:30 opening, where price can pull against the move that began at 8:30. We get this nice drive lower. Down here, I’m not simply looking at the low. I’m looking at the bodies.

That’s a rejection block. If price trades there, I want to take something off before it turns against me. I took a partial at this fair value gap.

[32:56] I took another partial around 31,115, and another around 31,140. This was happening very quickly on the one-minute chart.

On the next candle, I wanted price to drive below that low and into this gap. I had limit orders there and slightly lower.

[33:30] It didn’t do that. The next candle turned, and then we became indecisive.

At that point, I started reducing the position one contract at a time. Finally, the last two contracts were stopped out at the trailed stop loss.

The market then went higher, returned to my event horizon, pulled back, got very close to the June 22nd high, stopped, and then traded lower again.

Fading the initial impulse

[34:13] I’m much more comfortable fading the Non-Farm Payroll move after the initial volatility and seeing what it left in its wake. Then I can attack the traders trying to participate in the original 8:30 expansion. If my extreme downside objective gets hit, great. If it doesn’t, I don’t care.

[35:32] Even when the data appears to support a directional idea, you don’t realistically have enough time to read the data, interpret it, and execute before the reaction occurs.

Limit orders aren’t a reliable answer either because the market is simply moving too fast.

[35:59] So I wait for the initial reaction, then look for a meaningful retracement.

[36:31] Now I have a high I can measure from. This high can be used with the June 22nd daily high because I had already been looking for higher prices on the daily NQ chart.

We have this finite intraday high and this finite daily draw. From those two points, I can calculate the midpoint. That’s the event horizon.

[37:38] For experienced students with established models who occasionally want to trade in more volatile conditions, this is how I approach it.

I try to trade against the initial Non-Farm Payroll impulse once the structure gives me a reason to do so. I generally approach PPI and CPI in the same way.

PD Arrays after reversal

[39:47] Price ultimately got very close to the June 22nd high, then rolled over.

You can see a fair value gap, an order block changing state of delivery, another fair value gap as price breaks lower, another fair value gap, another break lower, and then price trades back toward the downside objective I had been aiming for.

[40:20] Here’s another PD Array.Watch this wick low and this wick high. Draw that out and look where the bodies are stopping.

Price trades down into that range, the bodies respect it, and then it rallies back up.

[40:51] From there, we move into no man’s land. So that’s going to be it, folks. It’s typical of Non-Farm Payroll weeks for me to have a shorter week with you. Lord willing, I’ll spend some time with you next Monday. Until I talk to you then, be safe.