From the Trading Desk

Friday Morning Coffee: Jobs Report in Focus

Futures are pushing higher this morning in anticipating a positive jobs report. Yesterday’s action was once again okay as the NASDAQ and S&P 500 closed lower without too much damage. The Dow hit its 7th all-time high in a row. There is nothing bearish about new all-time highs. Yes, we need a bit of consolidation. However, we continue to see this uptrend slowly move higher. Volume was mixed with NYSE volume higher on the session as volume on the NASDAQ dropped the day after AAPL trading post earnings. The most troubling part of today’s session was Small Caps ending lower by more than 1%. The poor group broke through its uptrend support and is now sitting just above its July highs. If there is anything to be worried about is the Russell 2000. There are some kinks in the armor, but we still are maintaining this uptrend.

Typically, in the second paragraph on this day we typically post something about sentiment. We have not seen much movement warranting something to talk about. Sure, you may check AAII, II, and/or NAAIM Exposure index. However, you are not going to see much change week-over-week for quite some time. Traditional measures of the stock market are simply not working. Sentiment is just not what it used to be with electronic trading. We can joke about computerized trading, but quite honestly it does impact how the market trades and influence sentiment. This does not mean the market will continue to move higher without corrections. It simply means sentiment readers have yet to adapt to the new world. Price will tell us all we need to know anyways and it is what we should be focused on.

Let’s see how this market reacts to the jobs report. Will it be a huge number or weak? ADP jobs were adjusted higher and were better than expected. Perhaps the non-farm payroll figures will follow suit. We have no idea and would a huge number push the market higher? Or would it signal the fed to move on interest rates this year instead of March of 2018 as odds indicate now? So many questions and ones we won’t answer. We’ll wait and react to the market movements and let the guess work to others.

We hope you have a great weekend. Get out there and enjoy your friends and family. There are not too many days left in this summer season. In Maui, it is summer every day!

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