Friday was a reversal of fortune session. A solid jobs report initially had people pleased, but biotech / momentum stock selling led to selling that did not relent. Indexes finished near sessions lows as the NASDAQ continues to be the weak sister, down a whopping 2.6% to the S&P 500’s 1.25% drop. If you want an interesting stat, this is the first jobs report Friday the market has been down in a year.
The U.S. created 192,000 new jobs in March after a gain of 197,000 in February, according to the Labor Department. The unemployment rate was unchanged at 6.7 percent. Economists polled by Reuters had expected employment to increase 200,000 last month and the unemployment rate to dip to 6.6 percent. The labor force participation rate, or the proportion of working-age Americans who have a job or are looking for one, hit a six-month high of 63.2 percent.
The S&P 500 fell right back to this upper trend line in purple – almost perfectly. The NASDAQ – let us note – has finally done something new for the first time in a year and a half. Each time we broke this purple trend line at the bottom part of its channel we’ve immediately seen a V shaped rally over the ensuing weeks. This is the first time that did not happen so this could be very important.
We mentioned Wednesday that Tesla (TSLA), *if* it could hold this breakout could be ready for a new leg up. Obviously today was a failure of that breakout so for short term traders, it was a day to stop out near $220 and re-assess.
Biotech continued its very bad action of the past month+.
Other momentum names such as Facebook (FB) and Priceline (PCLN) took bit hits.
If you have been following the high frequency trading story this week, with Michael Lewis and his new book here is an infographic on what happens to your order when you hit “buy”.
Next week we will begin a new earnings season and all the volatility that comes with that. Have a good weekend.