US Jobs Report punches SPX beneath the 50-day Moving Average
Stock-Markets / Stock Markets 2016 May 06, 2016 - 03:20 PM GMT
The SPX Premarket appears to have fallen beneath the 50-day Moving Average.
The mover is the huge monthly payrolls miss. ZeroHedge reports, “It appears that the Fed is now officially "one and done" because the only indicator that until recently "confirmed" a "strong recovery", non-farm payrolls, just had a major stumble.
In yet another Goldman jinx which just two days ago boosted its payrolls forecast from 225K to 240K, moments ago the BLS reported that ADP's ominous print was right when it said that April payrolls rose only 160K, far below the 200K expected, and higher than just 1 of 92 economist expectations. This was the lowest print since last September's 145K.”
Labor force Participation dropped again, explaining, in part, why the unemployment rate remains stuck at 5%.
The VIX correction needed one final pullback before going higher and it got it in conjunction with the payrolls report in the form of a stop hunt to clear out some timid longs.
ZeroHedge observes, “The machines went wild when the dismal jobs data struck. The instant reaction was a complete crush of VIX (despite stocks tumbling, Gold surging, and bond yields plunging), but that rapidly turned around and now VIX is heading higher again... Gold is now up 22% Year-to-date as S&P futures indicate cash will open in the red for 2016.”
Of course, the “one and done” message from the Jobs Report opened the doors for a larger flow of money to bonds as a safe haven. The new Head & Shoulder neckline was challenged, but not pierced. However, the message is clear. Any further decline in yield may bring on a “measured move” to the H&S target.
USD made a quick decline to the morning low of 93.28, bouncing back in a probable Wave c of a correction. This indicated a further decline.
The downside target has been revised, since the retracement went above the Cycle Bottom. The new target is now 90.66,, which is not far from the original target of 90.50.
We may see this target being hit in the next few days.
Regards,
Tony
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