The bulls got off to a good start for the week as Monday’s continued rebound stretched their streak to 2-straight and gave them some momentum. Tuesday’s run to resistance and fresh all-time highs validated our stance to stay long and strong during the prior week’s selloff as the bulls got a hat trick.
Wednesday’s session was slightly volatile as the ADP Employment numbers came in slightly below expectations. This caused some early morning weakness before the bulls rebounded to get their fourth-straight win. Thursday’s drive for five started with fresh intraday highs for the Dow and S&P before a late day fade and slightly lower finish. Tech and small-caps were weak as they dipped 1% ahead of Friday’s Nonfarm Payrolls report.
Futures were up on Thursday night and into Friday morning and improved after NonFarm Payrolls came in at 192,000. While we weren’t nervous heading into the report, we warned of a possible “double top” or extended trading range developing if the bulls didn’t end the week strong. The market opened higher but the bears started their attack shortly after words and targeted Tech, small-caps, and the momentum stocks once again.
The bulls technically got the weekly win as the market edged higher, overall, but the action on Friday felt bearish. The bulls have a little wiggle room before the technical picture starts to favor the bears but they need another bounce back week and a close above prior highs to avoid what could become a serious meltdown. (continued…)