News:
Friday’s Jobs Report showed robust growth in the labor market, with 263,000 new jobs added in September.
The figure came in just shy of the Dow Jones/Wall St Journal estimate of 275,000. And sent markets into a free fall.
- Dow Jones -2.1%
- Nasdaq -3.8%
- S&P 500 -2.8%
- Russell 2000 -2.9%
The strong labor market means the Fed has no reason to pull back on rate hikes.
As the market sees it the Fed’s Hawkish stance will not change. And any doves is now dead.
As of today, it’s fair to assume another 0.75% interest rate hike come November.
Sector Round-Up
All 11 sectors ended Friday lower. The leading sector was the only one to lose less than 1%…
- Energy (XLE) -0.8%
The day’s biggest losers…
- Consumer Discretionary (XLY) -3.4%
- Technology (XLK) -4.1%
Technicals:
How low can we go?
As the bulls retreat, let’s look back 20 years…
Since 2008 the number of stock trading below their 200-day moving average has only gone lower four times.
And more notably, look at the snap in the other direction after the market reaches the bottom.
Our other signals provide few additional clues…
- The VIX is approaching 52-week highs, which favors the bears.
- RSI levels are neutral
- The Put-to-Call Ratio is oversold
Let’s look at the timing … and then we’ll give you our reading.
Timing:
It’s a big week for market news.
Our advice … buckle up for a wild rise.
- Wednesday, September’s FOMC minutes will drop at 2 PM
- Thursday, the latest CPI inflation data comes out premarket
- Friday is the unofficial start of earnings season with several big back reporting.
Dovish comments in the minutes, calming inflation, or solid earnings could provide a catalyst to bottom.
Regardless, we remain buyers at these levels. Our parting note…
- The day-to-day volatility has proved difficult to navigate.
- But the market has been this beat up before, and it always comes roaring back to life.
- This time isn’t different.
We’re not trying to time the bottom perfectly. We’re loading the boat for the bull run we believe is inevitable.
Watchlist:
*Low Float
^Open Position*BEATsupport at $5
*^RELL support at $18
FNGR support at $6
HROWresistance at $13, support at $11
^SAVA support at $40
ETNB resistance at $7.50
IMVT support at $9
EVTL support at $10
DCPH support at $17
RVNC support at $29
XFOR on watch
VIST support at $10.50
PRVB on watch
ADEA on watch
HLIT support at $13
ARDX support at $1.40
CANO support at $9