Send me real-time posts from this site at my email
Fan Yang

S&P500 (SPX) - Upside Still Limited Despite Strong Jobs Report

We recently discussed how retreating from 2530 showed that market was still bearish, specifically on the S&P500 index. In the following session, price rallied sharply and cracked the 2530 level. Still, we had mentioned that the bullish outlook should be limited to 2560-2600, and this is still the case.

S&P500 Daily Chart

(click to enlarge)

Bullish Engulfing Candle:
- The 1/4 session ended with a bullish engulfing candle.
- We should expect some follow-through, but I would still limit the bullish outlook to the 2560-2600 area. 
Event Risk:
- The Friday rally can be attributed to the better-than-expected jobs report in the US. 
- The forecast for non-farm payroll growth was around 179K, but the report showed 312K jobs added in December. On top of that, the previous month's number was revised up to 176K from 155K. (
The December Jobs Report Is Great News For Job Seekers
- While this is good sign that might support the stock market, it might not be enough to turn it bullish. We might now shift into more of a sideways consolidation, but still with bearish risk simply because the bullish trend has gone so long uncorrected. Now that the market appears to have capitulated, we should not expect such a sharp turnaround even though that has a non-zero probability. 

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue