Key Algorithm Calculated S&P 500 Support/Resistance Levels: 4540 (LARGE) / 4530 (LARGE) / 4500 (SMALL) / 4480 (MEDIUM) / 4440 (SMALL) / 4420 (SMALL) / 4400 (SMALL) / 4385 (MEDIUM) / 4360 (LARGE) / 4330 (SMALL) / 4225 (LARGE) / 4160 (LARGE)
Assessment: It was a good move up yesterday, but of course nothing is ever perfect in the stock market. The problem with the move yesterday was volume was very low. It’s almost if the bears didn’t care about the result and were waiting for something. The jobs report perhaps?? Well, the jobs report came out and after initial volatility the markets are curiously flat, although the NASDAQ is up a little more than the others. The NASDAQ loves free money and a weak jobs report perhaps means delayed taper by the Fed. I am not sure what to expect at the cash open. Things can always change once live trading hits. However, today’s jobs report should show you that logic and reason often go out the window. Basically nobody is going back to work and the market celebrates it. Anyone with a brain would say that is not a good thing. However, the stock market cares about free money and low interest rates and a bad economy will provide those things. It’s why I always tell people the market operates irrationally to news and predictions more often than it operates rationally. It’s an important lesson because there are people who bet on a bad jobs report and how that would be bad for the market. Sounds like a pretty straight forward idea and proper bet given the person’s assumptions…but then it’s all out the window. Sometimes it is almost better to say that the worse the news, in this current market environment, the better the market response. It’s very odd. I had one position which I will be closing today which was to take a shot on XLF benefiting one way or another from the jobs report. Like the indices it is flat right now so, it’ll be a flat return and I will be closing today. FMA members stay tuned for the alert. I would like to see the cash open. Then I will probably wait a few hours this morning to let things shake out and see where we are at that point. Looks like the bulls will have the ball though.
Good luck in your trades!