Friday was one of the wildest days on Wall Street in a long while, and you surely would not know that by the closing prices which finished nearly unchanged from the previous day. In the premarket, the monthly employment data was released and it came in below expectations. However, in the perverse world of Wall Street this was taken as a "good thing" because it might slow down any tapering of quantitative easing, or at least when it happens the reduction would be smaller since economic data remains mixed. This led to a launch up at the open, but a news release within the first 20 minutes of the day of Russia vowing to support Syria if attacked got all the algorithms in a tizzy and a huge selloff occurred in the following 30 minutes. This was then followed by an equally ferocious rally back up - and then finally in the afternoon things calmed down. Here is the intraday chart to show you the wild morning - these are 20 point S&P swings both up and down, all within an hour. And after all that the S&P 500 finished up 0.01% and the NASDAQ 0.03%.
Here are more details of the employment data:
Job growth was less than expected in August as the U.S. economy added 169,000 . The Bureau of Labor Statistics also said the unemployment rate dropped to 7.3 percent, its lowest since December 2008, but due primarily to fewer Americans in the labor force. July's number got knocked down to 172,000 from 188,000, and June's tumbled all the way from 162,000 to 104,000. Part-time jobs surged, rising 211,000 to 19.3 million, a gain of 1.1 percent from July.
Knowing the news is fine; but watching the reaction to the news is what is important as an investor. There are some very interesting things going on at the index level. The S&P 500 briefly came into contact with the 50 day moving average when the market was happy today but finished again below it.
The NASDAQ looks much healthier although it was rejected at the dotted blue line which connects recent highs.
We don't usually show the Dow Jones Industrial Average but the divergence between it and the NASDAQ for example is striking - rarely do you see one index look relatively positive and another look awful. The DJIA cannot even get over the 100 day moving average; in fact it is not even trying. Very strange.
The NYSE McClellan Oscillator is now on the third day in positive territory - this is a small positive; staying north of zero for an extended period of time would show breadth is expanding.
Oil, not surprisingly, rallied on the Syria news.
Silver has been rejected at a very obvious level - old highs - but is hanging in well and digesting a large move upward. If it can continue to do this it might build energy for a new leg up in the weeks ahead.
One area that did well this week were emerging markets