Futures were showing a strong open for Wall Street this morning ahead of the overseas market and before the Nonfarm Payrolls report came out. It was a good indication the market might move higher but once the news was released futures sold off.
Dow futures had made a 100-point swing from the midnight high up until our morning update. However, once the Nonfarm Payrolls report was digested, futures turned positive again and the bulls are having a good day.
The suit-and-ties were expecting a number north of 185,000 jobs added but we figured something in the 125,000 range. The official numbers were 113,000 jobs added.
Obviously, the cold weather had a lot to do with the disappointment but the zombies are saying it didn’t as other parts of the country were not affected. In any case, the unemployment rate fell to 6.6% but not because of job growth. It’s because more and more people are dropping out of the workforce and aren’t being counted. The government says unemployment is at its lowest levels since October 2008 but their math is always funny.
We mentioned Thursday’s action showed some bullish signs for a continued back test and with today’s gains, the bulls are pushing the next layers of resistance. These levels served as major support prior to the January and Monday breakdown.
Today’s action is again bullish and the close will be important as the bulls need to hold or advance current levels. Monday will be even more important to see if there is a continued follow through.
Our portfolio is light after locking up 2 more profitable trades this week. We have room to add up to 5-10 new trades but with the rebound off the lows, we need to be careful.
We should get better clues next week if the rally continues and the next wave of resistance clears. If so, we may look at call options but we believe there could be additional selling pressure ahead so we want to check the charts over the weekend before putting new money into play.
The Dow is up 118 points to 15,747 while the S&P 500 is gaining 17 points to 1,790. The Nasdaq is advancing 53 points to 4,110 and the Russell 2000 is higher by 9 points to 1,113. The S&P 500 Volatility Index ($VIX, 15.49, down $1.74) is down 10% and is pushing 15.
We have some last minute updates on our current so let’s get on it. We will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily. Until then, have a great weekend everyone!