Täna kell 15.30 (tund enne USA avanemist) USA tööjõutururaport mai kohta, olulisim number mida vaadata on ootus uute töökohtade suhtes, oodatakse 185K koha lisandumist.
Nasdaq jõudis eile oodatul 2100 punkti alla, lähipäevade tants selle taseme ümber üsna oluline.
Rev Shark ka tööjõuraporti teemal:
Traders Applaud Weak Jobs Report
The jobs report is a bit weak and may help reinforce the idea that the FOMC is near the end of its interest rate hikes. Nonfarm payrolls were 78,000 vs. consensus of 175,000, the unemployment rate was 5.1% vs. expectations of 5.2%, hourly earnings met the +0.2% consensus and the average workweek was inline at 33.8 hours.
The market is starting to tick up on the news. Remember, the key here is that inflation is contained and that may get the FOMC off our backs. Slowing growth is a secondary concern right now.
Here's What We Need to Move Higher
"Now and then it's good to pause in our pursuit of happiness and just be happy."
-- Guillaume Apollinaire
The market has shown little inclination that it wants to pause and simply savor the outsized gains it has racked up over the past month or so. The nature of most market participants is to never be satisfied. Those who have done well want more while those who have lagged get anxious and try to catch up. Eventually this pursuit for more and more leads to excess and sharp reversals. The question is not if that will occur but when and to what degree.
Yesterday the S&P 500 and DJIA consolidated recent gains to some extent but the Nasdaq and technology stocks in general were able to maintain a strong upside bias. The Nasdaq is now within spitting distance of major resistance at 2100, a level it has not been able to get through on a closing basis since January 2005. Volume dipped on all major indices, but price action was fine, as was the action in many individual issues. Breadth was positive, but not solidly so. Chips stocks led the Nasdaq higher, with the Semiconductor Holders Trust (SMH:AMEX) breaking through major resistance at 35 and hitting a new high for 2005. Select retailers were also especially strong (ANF BEBE JWN STGS PSUN WTSLA AEOS), as it is clear that the consumer is not yet tapped out (at least those who have teenage children).
The market remains in fine shape with strong upside momentum but it is overbought and in need of some rest. Ideally at this point we would get pullbacks, which would help create cup-and-handle patterns. This would shake out some weak hands and set up breakouts to new highs. For example, the Nasdaq now is now back to the same levels it was at in early March. We have a rather deep cup but now we need a pullback in the form of a handle that will help consolidate gains and shake out marginal holders. Ideally, a shallow, lower-volume pullback lasting a week or two would help form a very bullish pattern but we badly need a rest now.
We have the jobs report this morning, which may serve as a catalyst for a strong move. A strong number may help fan inflation fears again despite the comments from the Dallas Fed head earlier this week. On the last report the market jumped on the strong number initially but sold off later in the day as inflation worries started to sink in. I would not be surprised to see that occur once again.
The strength this week has been in large part justified by the idea that the FOMC is done or nearly done with its rate hikes. A strong jobs number or one showing wage inflation may create the perception that the economy remains too strong, or inflation remains a problem, keeping the FOMC active. In a bull market, we should be able to get beyond whatever comes out of the employment report, but when the market is extended, it can provide the excuse for a needed dip. Hopes for a dip may just be wishful thinking, as the market simply has not cooperated, forcing institutions to chase stocks. These same institutions should provide support on a dip, especially at support levels. Things are likely to be very choppy today so be careful.
Early action is slightly negative. Asian markets saw gains while Europe is mixed. Oil is trading up and gold continues its recovery.
Short SMH, long WTSLA