Jobs’ Numbers Data, New S&P All-Time Highs

Danny Riley
April 4, 2014

The S&P [SNP:^GSPC] traded into another new all-time contract high on Thursday, while the Dow Jones Industrial Average [DJI:^DJI] reached a new intraday high, sold off mid-session and rallied late in the day to close +0.1% higher. The Nasdaq suffered its first loss in five sessions. The S&P traded at its second straight high on Wednesday and its 8th new high in 2014.

ES 06 14 5 Min 4 4 2014 1024x546 Jobs Numbers Data, New S&P All Time Highs
ES 06 14 5 Min 4 4 2014 1024x546 Jobs Numbers Data, New S&P All Time Highs

Short and sweet

I think we have been more right than wrong over the last three weeks starting with the PitBull’s Thursday-Friday low before expiration. We told you about the selling of the big four-letter stocks in the last week of March and then the buybacks of the last 4 days. Are we perfect? No, but we always give it our best. This morning we will see the March jobs report, which has already been heavily advertised as a sharply higher number. Much of this has to do the extreme cold weather that took over the U.S. starting in January until a few weeks ago. Bloomberg’s non-farm payroll consensus is 206,000 and the consensus range is 175,00 to 275,000. Goldman is looking for “a bounceback to 200,000″ and a drop in the unemployment rate from 6.7% to 6.6%.”

Pie in the sky

Based on the last two days of volume in the S&P — 1.1mil on Wednesday and 1.23mil yesterday — it looks like investors took to the sidelines ahead of today’s monthly U.S. employment data. Whisper numbers pointing to a strong showing this morning. The March U.S. payrolls numbers are going to be major test that the economic weakness from January and February was due to bad weather and the recovery is still moving along. The median forecast is for a rise of 200,000 in payrolls, though many floor traders we spoke to say they thought the numbers could come in above 220,000.

The Asian markets closed mostly lower and Europe is trading mixed. Today’s economic calendar is focused on the 8:30AM ET release of the Nonfarm Payroll number and the Economic Situation report. The consensus is for it to be higher than February’s gain of 175,000 new nonfarm jobs. Dallas Federal Reserve Bank President Richard Fisher speech on monetary policy in Hong Kong,and Treasury STRIPS comes out at 3:00PM ET. If you think the week is over, you have another think coming…

Our View

There have been buy imbalances all week. Can you see how important month-end and beginning of the month buying and selling is to the marketplace? I’m not talking about to the second, I am talking about timing — how money flows in and out of stocks and when you can expect it. Here is what I think: There is a big possibility that the jobs number comes in higher and there is a very good possibility that the S&P will react in kind to the upside, but will the highs hold? Our feeling is if the S&P gaps sharply higher there will be some type of “countertrend Friday” trade, but after that, if the S&P starts moving back up again, shorting will not be advised. Above my 1885- 1890 level are a BUNDLE of buy stops that go all the way up to 1908 to 1912. I’m leaving it like that. I hope you have a great weekend and thanks for flying with MrTopStep.

Sign up for the Saturday, April 12, webinar featuring Jeffrey Hirsch from the Stock Traders Almanac and Danny Riley from MrTopStep End of the Best 6 Months for Stocks

04/12/2014 11:00 CT

STAad Jobs Numbers Data, New S&P All Time Highs
STAad Jobs Numbers Data, New S&P All Time Highs

End of the Best 6 Months for Stocks — An open discussion on where stocks are now and where they are going

  • Midterm Election Year History & Tendencies
  • End of the Best Six Months Strategy
  • Sell in May But Don’t Go Away
  • Q2/2014 Outlook
  • Summer Shorts
  • Sector and Commodity Seasonal Set-Ups

Bonus! A chance to win a copy of the 2014 Stock Traders Almanac (A $50 value)

As always, keep an eye on the 10-handle rule and please use stops when trading futures and options.

  • In Asia, 7 of 11 markets closed lower: Shanghai Comp. +0.74%, Hang Seng -0.24%, Nikkei -0.05%
  • In Europe, 6 of 12 markets are trading higher: DAX +0.38%, FTSE +0.45%
  • Morning headline:“Markets seen higher, awaiting jobs report”
  • S&P Fair Value: 1881.42 (futures 4.08 higher at 1885.5 as of 7:20AM CT)
  • Total volume: LOW 1.24M ESM and 4.2K SPM traded
  • Economic calendar: Nonfarm payrolls number, Dallas Fed President Richard Fisher speech on monetary policy in Hong Kong, and Treasury STRIPS.
  • E-mini S&P 5001845.00+7.00 - +0.38%
  • Crude102.54+2.10 - +2.09%
  • Shanghai Composite0.00N/A - N/A
  • Hang Seng22596.971+219.82 - +0.98%
  • Nikkei 22514606.88-201.97 - -1.36%
  • DAX9490.79-20.06 - -0.21%
  • FTSE 1006590.69-32.15 - -0.49%
  • Euro1.3798
 Jobs Numbers Data, New S&P All Time Highs
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Jobs Numbers Data, New S&P All Time Highs
 Jobs Numbers Data, New S&P All Time Highs
Jobs Numbers Data, New S&P All Time Highs