The bulls needed a goldilocks Nonfarm Payrolls number this morning to break through resistance while the bears needed a number north of 200,000.
Wall Street was shocked the monthly report showed Nonfarm jobs rose 74,000 versus expectations for 197,000. The unemployment rate fell to 6.7% versus a forecast for 7.0%.
We didn’t make a prediction but we knew the weather would play a role in disappointing the suit-and-ties. As far as the market, we thought there could be a rally and a push to resistance as futures stayed steady throughout the night and after the news but the action is being controlled by the bears as we head into the second half of trading.
The bulls were close to breaking even for the week but the fade lower is favoring the bears as they are on track to get their second-straight weekly win.
There is still a second half to go and even though the clouds are dark, the VIX is below 12.50 and the official start of 4Q earnings season gets underway next week. JPMorgan Chase (JPM, $58.58, down $0.18) and Wells Fargo (WFC, $46.16, up $0.24) announce their numbers on Tuesday; Fastenal (FAST, $47.58, up $0.99) on Wednesday; Intel (INTC, $25.55, up $0.24) on Thursday; and General Electric (GE, $26.92, down $0.30) on Friday.
There could be a late day push back to even and we have given you the lower levels of support to watch in case there isn’t.
The Dow is down 37 point to 16,407 while the S&P 500 is lower by 2 points to 1,836. The Nasdaq is down 2 points to 4,154 and the Russell 2000 is UP a point to 1,160. If the small-caps can hold 1,160 it would be super bullish for next week. The S&P 500 Volatility Index ($VIX, 12.42, down 0.47) has stayed below 13 despite today’s pullback and is a bullish sign for next week – or a continued trading range as long as support holds.
We have some last minute updates for our current trades so lets go check the tape. We are taking partial profits in a trade that is up 125% so please read our instructions carefully.
We will be back Sunday night with the Weekly Wrap (and more possible earnings trades) and Monday morning with the Daily. Until then, have a great weekend everyone!