MomentumOptionsTrading.com Morning Update for 5/2/14
Nonfarm Payrolls Please the Street/ Futures Up
The market traded in a tight range on Thursday, as we expected, with the bears getting the session win by taking 3 of the major 4 indexes. The bulls managed to take Tech higher but the clues we were looking for gave us mixed feelings heading into today’s Nonfarm Payroll report. (Read more…)
The Dow dipped a double-deuce (22 points), or 0.1%, to finish at 16,558. The blue-chips traded in a tight 79-point range with the high checking in at 16,604. The bears pushed 16,525 and the action in the Dow left no clues ahead of the close how today might go.
The S&P 500 slipped a 1/3-point, or 0.01%, to settle at 1,883. The 10-point range was confined to 1,888-1,878 and while 1,875 held, we wanted to see a close above 1,885. This gave us a slightly bearish feeling.
The Nasdaq gained 13 points, or 0.3%, to end at 4,127. The bear pushed 4,105 but couldn’t crack 4,100 while the bulls were able to clear and hold 4,125 after pushing Tech to a high of 4,149.56. This was slightly bullish but we talked about major resistance at 4,150. The fact that the bears held this level by a half-point made us a little nervous last night as we pondered how today might play out.
The Russell 2000 gave back a point, or 0.1%, to finish at 1,125.97. The small-caps traded down to 1,114 and and into the 1,115-1,110 zone we have been highlighting as a warning sign 1,100 (or lower) could come back into play again. The bulls recovered to reach a peak of 1,133.73 but we wanted to see a close above 1,135. The blackjack action suggested buying some insurance into yesterday’s close.
The S&P 500 Volatility Index ($VIX, 13.25, down 0.16) tested a high of 13.75 and settled the session lower after testing 13.10 shortly after the open. The volatility left us feeling bullish as the index stayed below 15 and closed under 13.50. We have said the VIX would have a close below 12.50 if the S&P 500 triggers 1,900 and today’s action could determine that outcome, or not.
Nonfarm Payrolls came in at 288,000 and we talked about how the economy needed to see 280,000-300,000 jobs added for the month of April. We didn’t nail the number but we came pretty close to splitting it down the middle.
As we head from desk to press, futures look like this: Dow (+24); S&P 500 (+3); Nasdaq 100 (+6).