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Bad Friday Report...Good Monday Results After Stock Market Scare Lower...

Stock-Markets / Stock Markets 2015 Apr 07, 2015 - 12:13 PM GMT

By: Jack_Steiman

Stock-Markets

The market was closed Friday, but most traders were paying close attention to the all-important Jobs Report. A very anticipated number, since it would show whether the economy was truly recovering or whether it's still going nowhere. The weather excuses going have gone away. The number was nothing short of terrible. Less than half the job creation than was expected. The futures went in to free fall. Bad news being treated as bad news. The Dow futures were down over 200 points, while the S&P 500 was down over 20 points. Nothing good for the bulls, and this was only Friday. What would happen on Monday? Down 300? Down more than that?


Well, it was bad, but not as bad as expected. The Dow was down a bit over 100 points. Once the gap lower hit the market things reversed quickly, taking all by surprise. I think even the bulls were surprised to see the life upward. The market spent much of the day gradually climbing higher, before falling back a bit at the very end of the day. That said, the bulls have to be pleased, while the bears are not so happy as the market did what really very few expected. Once again, the market is ignoring bad news, and once again, those nasty weekly and monthly charts are being ignored. It doesn't make much sense, but that's pretty much what the market is all about. Bottom line was it was a good day for the bulls and a very bad day for the bears.

Red flags. We did not see full participation from key sectors today. The transports were very weak, thanks in large part to great action with oil. It was a massive move higher for oil, and once we see oil moving higher it's no shock to see transport stocks moving lower. We also didn't see great action from the banks, nor the semis. It would be nice to see those stocks leading, instead of more of the commodity world stocks. Plenty of technology stocks did great, but many lagged badly.

I'm not 1005 sure what to make of it, but in the end price talks and no one who is bullish should be arguing about price today. That said, it's my job to look underneath the surface. It is a bit disappointing to see so many leading sectors lag badly, but there was enough rotation--there's that word again--to keep things positive overall for the bulls. If we can follow through on today's solid action in the very near-term, then it would be important, I think, to see those leaders pick up the pace. You can't have transports lagging for too long, before it would have an adverse effect on the rest of the market.

We can talk forever about the dangers of this market. They are real, but Fed Yellen, and her actions, is keeping the bull market alive without taking too big a hit, just when it seems the big one is here. 2045 on the S&P 500, and 2119 on the S&P 500, are the two big levels. 2045 represents a one percent break of key, trendline support. 2119 is the old high. You can safely say that anything in between those two levels is noise. But there has been some decent oscillator unwinding these past many weeks, so there is always the possibility that we can try to break out over the coming weeks, but we shall see.

Good unwinding of key oscillators, along with little in terms of price erosion, is not bearish. Watch those two levels for more guidance. Until then the bulls remain more in control big picture. Short-term is still mixed.

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

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