Yesterday was a good session. But that’s the problem, as it had the makings of being a great session. Out of the gate like a rocket ship, the bounce lost altitude into the closing bell.
Holding Gains | High | Close |
S&P 500 | 4,429 | 4,399 |
NASDAQ | 14,755 | 14,654 |
Russell 2000 | 2,265 | 2,250 |
Big Moves & Big Gaps
The market has gapped open each session this week reflecting an underlying sensitivity and confusion on the part of investors – especially those algorithms.
Wednesday’s stumble out the gate allowed all the NASDAQ 100 to fill a downside gap and reverse higher. Those are the nuanced things I’m looking for from a technical point of view. In addition, we have to see a strong session that closes at the high point of the session.
To see the chart, click here.
Straddling the 50
I’m also looking for the S&P 500 to get back above its 50-day moving average. Moreover, the chart is showing signs of developing a downside channel.
Message of the Market
Consumer discretionary is looking good on hopes Covid19 is winding down and pent-up demand can be unleashed.
S&P 500 Index | +0.83% | |
Communication Services XLC | +0.64% | |
Consumer Discretionary XLY | +1.56% | |
Consumer Staples XLP | +0.44% | |
Energy XLE | +0.77% | |
Financials XLF | +0.65% | |
Health Care XLV | +1.33% | |
Industrials XLI | +0.78% | |
Materials XLB | +1.30% | |
Real Estate XLRE | +0.13% | |
Technology XLK | +0.91% | |
Utilities XLU | -0.53% |
Watch the VIX
I have to say the so-called fear index hasn’t been too fearful. There have been occasional big percentage spikes to the upside, but retreats have quickly followed. The market is more volatile that’s for sure, but the VIX is staying within the bounds of reason.
Portfolio Approach
We are taking profits in Industrials and adding a new Industrial position this morning in our Hotline Model Portfolio.
Today’s Session
The futures dipped initially on the September’s jobs report but have since turned around. The number was a big miss at 194,000 versus consensus for 500,000.
· +317,000 private sectors
· -123,000 government
Payrolls sector highlights | September | August |
Trade/Transport | +120k | +47k |
Leisure/Hospitality | +74k | +38k |
Business Services | +60k | +85k |
Retail | +56k | -4k |
Manufacturing | +26k | +31k |
Construction | +22k | 0k |
Temporary Help | -5k | -4k |
Education /Health | -7k | +51k |
Government | -123k | +34k |
- Hourly wages +0.6% consensus +0.4%
- Labor force -183,000 participation 61.6 from 61.7
The unemployment rate of 4.8% was a pandemic low, however, the number is largely a result of people dropping out of the job market.