S&P 500 Index (SP500)

[DiscoverGold]

Trading Notes: Friday, February 5th
By Brett Steenbarger, Ph.D.

* February 5, 2016

* Despite a morning selloff after early strength, stocks finished the day on the firm side. 432 stocks across all exchanges touched monthly highs versus 293 monthly lows. Over 50% of SPX shares are trading above their 3, 5, 10, and 20-day moving averages. I am watching closely to see if breadth can expand in today's trade. The response to the non-farm payrolls number will have a lot to do with that.

* Interestingly, my cycle measures are near levels that have corresponded to market tops. Should we be unable to surmount the highs reached on February 1st, that would invite the hypothesis that we've put in an intermediate-term top and are likely to retest recent lows.



* Working off the oversold cycle readings with a relatively modest bounce from the lows is once again an indication that the 2016 market is different from those experienced in 2014 and 2015. The weaker US dollar has added an interesting element to stock prices. Note the recent strength of raw materials share (XLB). The bounce in housing shares (XHB) has not been impressive.

http://traderfeed.blogspot.com/2016/02/trading-notes-for-week-of-february-1.html

• George.

Click on "In reply to", for Authors past commentaries.