To gain an edge, this is what you need to know today.

Disappointing Jobs

Non-farm Private Payrolls came at 168K vs. 193K consensus.

Average Hourly Earnings rose 0.15% vs. 0.20% consensus.

For the economy, this jobs report is disappointing. However it is not clear what it means for the stock market.  On the positive side, the weak jobs report means that interest rates should tick down which should be positive for stocks.  On the negative side, this jobs report questions the growth thesis that has been powering the market lately.

Under these circumstances, it is especially important for investors to pay attention to the ‘What To Do Now’ section below.

Momo Crowd And Smart Money

In the early trade, the momo crowd started out by buying and then they sold after the jobs report was released.  As of this writing, the momo crowd is buying again.

The smart money is inactive.

Developing Pattern In The Most Popular Timing Indicator

The most popular timing indicator is the 200 day moving average. The indicator derives its power not from anything innate in the stock market but from the legions of investors who believe in it. It often becomes a self-fulfilling prophecy.

Investors ought to pay attention to a developing pattern in the most popular timing indicator. Let’s explore with a chart.

Please click here for an annotated chart of S&P 500 ETF (SPY). Similar patterns can be observed in the charts of Dow Jones Industrial Average (DJIA), Nasdaq 100 ETF (QQQ) and small cap ETF (IWM). Please observe the following from the chart:

• The chart shows the overshoot the stock market experienced.
• The chart shows the retracement of the overshoot.
• As of this writing, the stock market is around the 200 day moving average.
• The foregoing three items constitute the developing pattern that investors ought to pay attention to.
• There is not enough historical precedence to know how this pattern resolves itself.
• The chart shows that following this timing indicator would have saved investors losses suffered during the financial bubble and the internet bubble.
• The chart shows numerous false signals this indicator has generated. Investors may want to note that believers in this indicator tend to not even acknowledge the false signals.

Investors ought to bring more sophistication to their investing and use a more complex model such as ZYX Global Multi Asset Allocation Model that has a significantly better track record and uses inputs in 10 categories. These inputs include technicals, fundamentals, macro and intermarket analysis. Please click here to see the 10 categories of inputs. Further investors ought to guard against getting whipsawed by selling when the market falls below the 200 day moving average and buying when the market goes above the 200 day moving average. In spite of the shortcomings of the 200 day moving average, it should be on the radar of every investor.

Gold

As is the historical pattern, the momo crowd aggressively bought gold immediately after the jobs report was released.  The dollar should have weakened on the jobs report.  When the dollar did not weaken as expected, selling came into gold causing losses for the momo crowd.

Oil

Oil continues to levitate on Iran concerns.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is undeterminable because there is too much noise in the data, but expect the market to open lower.

Interest rates are ticking down and bonds are ticking up.

Gold futures are at $1310, silver futures are at $16.43, and oil futures are $68.60.

S&P 500 resistance levels are 2631, 2661 and 2688; support levels are 2615, 2600 and 2575.

DJIA futures are down 107  points.

To gain an edge, this is what you need to know today.

June Rate Hike

The Fed left rates unchanged as expected.  The interpretation of the Fed statement is that the Fed is on track to raise interest rates in June.  The Fed will announce its decision on June 13th at 2:00 pm ET.

There is significant economic data to be released between now and the next meeting. The new data may influence the Fed’s decision.

Trade Concerns

Treasury Secretary Mnuchin and Commerce Secretary Ross are in Beijing.  This morning there are serious concerns about trade talks.  The dollar is slipping and there is selling in stocks.

Right now the market is focused on the negative side of trade. However, if Mnuchin and Ross reach an agreement  with Beijing, expect a strong rally in the stock market.   It is important to stay alert as it can go either way.

Smart Money And Momo Crowd

The momo crowd is selling stocks this morning.   The smart money is inactive.

Gold

Gold is moving higher on dollar weakness.

Oil

Oil is range bound on Iran concerns even though the inventory data is bearish.

Technical Patterns

Biotech shares are tracing a Top Triangle. This is bearish. ETFs of interest are IBB  and XBI.

Turkish stocks are tracing a Megaphone Top. This is bearish. ETF of interest is TUR.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is negative but can quickly turn up.

Interest rates are ticking down and bonds are ticking.

Gold futures are at $1316, silver futures are at $16.56, and oil futures are $67.70.

S&P 500 resistance levels are 2631, 2661 and 2688; support levels are 2615,  2600, 2575, and 2550.

DJIA futures are down 97  points.

To gain an edge, this is what you need to know today.

The Fed Day

The Fed will announce its decision at 2:00 pm ET.  The consensus is that the Fed will keep interest rates unchanged. Our focus will be on reading the tea leaves in the accompanying statement that will provide important clues for the future.

Apple Earnings

Apple (AAPL) earnings were better than the whisper numbers.  This is contributing positive sentiment.

Mueller Subpoena

Mueller has apparently let it be known the he will issue a subpoena if Trump refuses to be interviewed. This is causing serious concern.

Momo Crowd And Smart Money

The momo crowd is lightly buying stocks this morning. Smart money is inactive.

ADP

ADP is the largest private payroll processor.  It uses its data to give a glimpse of the employment picture ahead of the official employment report.

ADP Employment Change came at 204K vs. 225K consensus.

Gold

Trading in gold is listless.  Major support at $1300 is just below.

Oil

Oil traders are waiting for EIA data that will be released at 10:30 am ET.  API data was bearish.  It came at a build of 3.43 million barrels vs. a consensus of 0.74 million barrels build.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is negative but it can turn positive very quickly.

Bonds, interest rates and currencies are range bound.

Gold futures are at $1309, silver futures are at $16.42, and oil futures are $67.19.

S&P 500 resistance levels are 2661, 2688 and 2700; support levels are 2631, 2615 and 2600.

DJIA futures are down 53 points.

To gain an edge, this is what you need to know today.

Dollar Rises

The dollar continues to rise crushing various other currencies.  In our analysis, this is due to almost everyone being on one side of the boat.  Here is how we explained it yesterday and gave you an early warning of the dollar’s strength.

The dollar is getting stronger. Here is an important lesson that all investors should learn.  Lately almost all analysts and almost all big players have been forecasting the dollar to become weaker.  Instead the dollar is becoming stronger.

The best way to understand is the analogy of a boat.  When everyone is on one side of the boat, it does not take much to tip the boat.  Here everyone was only on the bearish side of the dollar.

Strong Dollar Causes Jitters In Stocks

S&P 500 companies derive a significant portion of their earnings from abroad.  When the dollar gets stronger, earnings from abroad mean less when converted into dollars. This is beginning to cause jitters among informed investors.

Momo Crowd And Smart Money

The momo crowd is buying in the early trade.  The smart money is inactive.

New Month Money

Today is the first day of a new month.  Money pours into the market in the first couple of days of the month.  This should provide some support.

Wait For Apple Earnings

Apple (AAPL) is the largest corporation by market cap and one of the most widely held stocks especially among retail investors.  AAPL earnings also significantly affect the stock prices of its suppliers.  AAPL reports earnings after the market close.  These earnings may have a significant impact on the overall sentiment.

Gold

Gold is falling on the stronger dollar.  The momo crowd is selling. Smart money is inactive.

Oil

Oil is pulling back on the stronger dollar.  We will do a separate post in ZYX Buy and ZYX Global.

Technical Patterns

None of note.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is negative but can quickly turn positive on new month money coming in.

Interest rates are ticking up and bonds are ticking down.

Gold futures are at $1307, silver futures are at $16.31, and oil futures are $67.78.

S&P 500 resistance levels are 2661, 2688 and 2700; support levels are 2631,  2615 and 2600.

DJIA futures are down 77  points.

To gain an edge, this is what you need to know today.

Positive Sentiment On Deals

There is positive sentiment in the market on a number of deals that have been announced. TMUS is buying Sprint (S ), WMT is selling it’s U. K. subsidiary and MPC is buying ANDV.

Smart Money And Momo Crowd

The momo crowd is aggressively buying stocks this morning.  The smart money is inactive.

Dollar Gets Stronger

The dollar is getting stronger. Here is an important lesson that all investors should learn.  Lately almost all analysts and almost all big players have been forecasting the dollar to become weaker.  Instead the dollar is becoming stronger.

The best way to understand is the analogy of a boat.  When everyone is on one side of the boat, it does not take much to tip the boat.  Here everyone was only on the bearish side of the dollar.

Gold

Gold is priced in dollars.  As the dollar gets stronger golds gets weaker. Gold is falling in the early trade on a strong dollar.

Oil

Oil is priced in dollars. Oil is falling on a stronger dollar.

Personal Income And Spending

Personal Income came at 0.3% vs. 0.4% consensus.

Personal Spending came at 0.4% vs. 0.4% consensus.

Investors ought to keep a close eye on personal spending as the U. S. economy is about 70% based on consumers.

Technical Patterns

Several mining stocks are tracing a Symmetrical Continuation Triangle. This is bearish. ETF of choice is XME.

This is powerful information and many investors use this to enter trades in addition to our official signals.  Here are the three most common uses: 1) Short-term trades in ETFs  2) Decisions to trim or add to long-term positions, and 3) New option trades. These should be used judiciously only in conjunction with macro, fundamental and quantitative indicators.  To learn more please click here.

Markets

Our very, very short-term early stock market indicator is positive but can quickly turn negative.

Interest rates and bonds are range bound.

Gold futures are at $1314, silver futures are at $16.32, and oil futures are $67.60.

S&P 500 resistance levels are 2688, 2700 and 2740; support levels are 2661,  2631 and 2615.

DJIA futures are up 122  points.