The first four days of this week have fulfilled the sideways-to-slightly-negative price action I was looking for on Monday. This was part of a healthy digestion of last week’s rally; although the price action at times was semi-volatile. The SPX sold off into my quantitative Oversold level and I purchased some equities in client accounts near SPX 1391. The SPX is currently resting on today’s Oversold condition of 1390; the Overbought level is 1414.
SPX futures were flat in anticipation of the release of the Employment Situation report. April’s Unemployment Rate is 8.1% with the change in Non-Farm Payrolls is below consensus at +115k. March Non-Farm Payrolls were revised upward by 34k. Futures sold off initially on this data. Expect some jockeying as these numbers are digested. Over the weekend, France will have an election and I think the market has come to terms with a Hollande win. Should equities finish positive today, equity bears will have very little momentum going forward.