STTG Market Recap Nov 2, 2012

Friday was a sordid affair for the bulls.  After a gap up to begin the day on a decent jobs report, stocks sold off the entire rest of the day only resting as the S&P 500 came back to test the 2012 highs of 1422.  Once that broke it was case closed.  Friday was almost a perfect parallel to Thursday but in reverse – the S&P 500  dropped 0.94% while the NASDAQ sunk 1.26%.  The broader Russell 2000 showed even more weakness, crumbling 1.63%.

Apple was crushed again, this time to the tune of 3.3%!  It sat on its 200 day moving average and once that broke it quickly flushed down, taking the rest of the market with it in the final 2 hours.

We mentioned yesterday two stocks that reported earnings the market liked – to show how out of favor tech is right now you can see the chart of LinkedIn (LNKD).  After gapping up to the $115s the stock sold off the rest of the day and actually ended in the red!

Starbucks (SBUX) however was a star of the day – I guess coffee > Silicon Valley right now.

The dollar shot up today for reasons that are unclear – some have speculated that better economic data = less quantitative easing so maybe that is the reason.  Frankly Bernanke has indicated he is going to QE in bad economy and good ones so if that is the reason it is a bit knee jerk in reaction but that is how Wall Street works.

The dollar strength hurt commodities – you can see how poorly gold did today and oil continues an awful few months.  While you might like lower oil for your pocketbook it is a bad signal as weak oil = risk off = sign of global economic weakness.

As for that employment data here are some details and a snapshot of job creation during the Obama administration.  Keep in mind simply to keep up with population growth the country needs to add 125K+ jobs a month.

  • The economy added 171,000 jobs in October, and unemployment inched up to 7.9%, from 7.8% in September.  The number of positions added in August and September were revised sharply higher, adding a combined 84,000 more jobs than first thought.
  • Roughly 12.3 million people remain unemployed, 40.6% of whom have been so for more than six months.


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  1. says

    Nice, succinct recap of last Friday’s market action.

    Given the extreme negativity in the market lately, I’m not surprised the bounce lasted only one day. However, I was personally hoping for the Nasdaq to at least bounce to near its 50-day MA in order to provide a low-risk short selling opportunity in $QQQ. Now, with bearish engulfing candlesticks, looks like we could be headed for another leg down to new lows already.

  2. says

    I agree, the leaders are acting weak and it looks like we are poised for a set of lower lows unless something dramatic happens with the election tomorrow.