We finally go the September jobs report showing a measly 148,000 jobs were added to the economy. The unemployment rate dropped from 7.3% to 7.2% despite the labor force participation rate held steady. At 10:30 the NASDAQ and momentum leaders were hit hard by a sell program or so we are told by CNBC. By 11 am the market found a low for the day and pushed back above the mid point of the day. Volume jumped across the board showing institutions are chasing performance here. It has been awhile since we have seen volume pile into the market. NFLX aside from the AAPL event was the stock most talked about with its stunning intraday reversal. Slightly concerning some market leaders were hit today, but hard to argue with all-time highs.
There is one index not hitting all-time highs and that is the Dow Jones Industrial average. There are plenty of reasons we could come up with to make excuses for the index, but the fact is it is lagging. Dow transports are at highs, yet industrials simply cannot make the move into new high territory. Hardly a reason to get bearish, but it is something we’ll keep an eye on if this market does roll over.
The plunge at 10:30 was swift and didn’t even last 20 minutes, but it did quite a bit of damage to some growth names. Two big names would be NFLX and TSLA. While TSLA doesn’t seem to be in all that bad of shape the move in NFLX is quite unique. Gapping up more than 30 points only to give way and lose roughly 30 points in a day is pretty remarkable. Even with QE this stock will find it difficult to recover quickly from today’s action.
Bonds saw a nice rally today after the jobs report was issued. If the government shutdown wasn’t reason enough for the fed to push out the taper the September jobs report was the piece of straw. Using TLT as a proxy it appears bonds have a bit more to rally and upside volume has been quite positive for the ETF. JNK and HYG have benefited from lower rates as well and perhaps we are seeing another flight to yield again. Look no further than XLU as it broke out today on above average volume. A move above July highs for XLU would be extremely bullish for the ETF.
Perhaps we are getting the flood of volume at the top. But, where is the correlation risk?
In the end, price is what pays and something we’ll continue to use as our proxy. Stay with the trend.
