What We Need Is for the Jobs Report to Shake Things Up
This has been a market with limited opportunity. Some volatility could change that.
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The market was in a holding pattern on Thursday, awaiting the August jobs numbers at 8.30 a.m. Friday morning. This report will significantly influence whether the Fed will cut rates by a quarter or a half point.
Magnificent Seven names exhibited relative strength on Thursday, but breadth was solidly negative, at around 4,200 gainers to 5,100 decliners. Meanwhile, the Russell 2000 IWM lagged, losing around 0.8% as bids dried up and buyers stood on the sidelines.
Recently, it has been a market with limited opportunity, as there has been growing concern over whether the economy is slowing faster than many folks had hoped. The Goldilocks economic narrative is no longer providing a tailwind for the bulls, and the Fed rate cut is already so well anticipated that the big danger is a sell-the-news reaction.
Hopefully, the August jobs numbers will increase volatility and shake things up. It is the last big data report prior to the Fed decision on September 18 so it will be interesting to see if there is some sort of trending action into that news.
Technical action has been quite poor for both the indexes and individual stocks, but the S&P 500 is still holding some support and has not yet filled a big bap on the chart that was formed on August 15. The Russell 200 is back under its 50-day simple moving average (SMA) for the first time since August 14, and the Nasdaq 100 QQQ closed weak.
I have my 20-stock shopping list in hand, but I’m waiting with limited patience for the right entry points to develop. Hopefully, the news about jobs will accelerate the chart development process and allow for more buying.
Have a good evening. I’ll see you Friday.
At the time of publication, Rev Shark had no positions in any securities mentioned.
