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.
Stocks had a quiet session Wednesday, digesting another huge V shaped bounce from the middle of last week. The S&P 500 fell 0.06% while the NASDAQ gained 0.13%. After large, quick moves up bulls want to see a bit of digestion before embarking on the next attempt upward. News flow was slow for the day.
Nevermind about yesterday's "warning signs" - we are in a BULL market. For readers who missed yesterday's recap there was a big yellow flag waving, a bearish outside reversal day on the S&P 500 - that is when the price of an index or stock rises above the previous day's high then falls all the way down to close below the previous day's low. Usually that is a near term bearish signal. But apparently it need not matter in a quantitative easing market. A huge rally today almost single handedly made yesterday disappear as if it never happened. There was also a big move in the Treasury market as today's employment data had some people jumping back on the "rates will be rising" in the future bandwagon. So today good news was good news, rather than the bad news = good news often seen lately. The S&P 500 gained 1.34% and the NASDAQ 1.60%.
A very quiet day as the markets digested the huge move of the past week and a half. It appears right now with D.C. out of the way and the Fed with zero chance to tighten for another half a year, no one really wants to sell despite overbought conditions short term. The government employment report, which was scheduled to be released two Fridays ago, will come out tomorrow due to the shutdown, but at this point the Fed is sidelined for the intermediate term as the "uncertainty" of this shutdown and the budget impasse / negotiations to come in January 2014 will have the Fed erring on the side of the caution. The S&P 500 gained 0.01% and the NASDAQ 0.15%. Most of the normal suspects rallied today as momentum traders are back in force and after the bell Netflix (NFLX) which already had a monster day, exploded after it reported earnings.
Stocks surprised to the upside Tuesday as many expected some significant losses on the first day of the government shutdown. However, the market has been selling off for a week and a half in anticipation of this event, and most also believe a resolution will come soon. The S&P 500 gained 0.80% and the NASDAQ 1.23% as recent outperformance by the NASDAQ continued. There was some good news from the ISM Manufacturing report released at 10 AM, but by that time the market had already rallied quite a bit.