Stock Indexes

[Chart Reader]

The Jobs report came in lower than anticipated (175k vs expected 250k) and that should not be seen as a positive. Nonetheless, the indexes are due to open higher and have rallied above where they were trading before the report. The DOW was up about 290 points but is now due to open about 500 points higher, the SPX was up about 19 points but is now due to open about 50 points higher and the NAZ was up about 112k but is now about 230 points higher.

This is the weekly close day and with the exception of the inflation report next week, all the important and possibly catalytic reports for the month and for the quarter (regarding earnings) are out and the traders will start making decisions as to what is going to happen for the next 3 months.

In addition, this is May and there is an old adage of "sell in May and go away". May has always been a slow month with a very slight tendency to the downside. As such, it is unlikely that the indexes will be heading higher, or at the least not heading higher in an indicative way.

Having said that, here are the weekly close levels in play today and what they mean:

DOW at 38722, at 39131, and at 37983. The former is the weekly close support level that got broken and gave a sell signal. A close above that level would generate a failure signal against the bears. The middle number is a resistance that if broke would mean that the bulls are committed to making a new all-time high and the latter is a level that if broken would generate much new selling to appear. The index is due to open around 38725.

SPX at 5117, at 5137 and at 4967. The same thing applies to the SPX as to the DOW. Due to open at 5114.

NAZ at 17808, at 17962 and at 17037. Same thing as the other indexes. Due to open at 17760.

As you can see by the numbers above, the indexes are all due to open at the levels where the sell signals were given. This is normal to chart trading. Having said that, today does look like it will be an important day and I would not be at all surprised if it is not a highly volatile day.

Products

Gold does not have any level close by on the weekly closing chart of importance. On the daily closing chart, the $2329 level does have some importance as it would give a failure signal to the break of that daily close support that occurred this week. Gold is trading at $2314.

Oil at 79.83. That is a somewhat important weekly close support that if broken would take away all the bullish action seen the past 9 weeks. It is trading at 78.90

[Chart Reader]

Today was a bit of a surprise, but then only on the intraday charts, given that the NASDAQ did get above the 200 10-minute MA in a convincing way. Having said that and in looking at the daily closing charts, nothing of consequence was accomplished, though the indexes did close at levels that if another green close occurs tomorrow, it will do some chart damage when it comes to the bears.

Let me explain:

The DOW closed today at 38503 and 38585 is the daily close support level that held up for 8 weeks and that when broken, brought about all the selling seen thereafter.

SPX, same as the DOW with the 5078 level. It closed today at 5070.

NASDAQ, same thing with the 17478 level. It closed today at 14471. In the case of the NAZ, that break was very indicative.

RUT has a very indicative previous (from July of last year) daily close resistance at 2003 and today it closed at 2002.

In all 4 cases, a close above those resistance levels would be indicative of some "new" outlook for the index market. On the opposite side of the coin, a red daily close tomorrow would mean the breakdown points have been tested successfully and that will give more ammunition to the bears.