Jobs Explode.... Financial's Do As Well..... Stock Market Grinding....

Stock-Markets / Stock Markets 2014 Dec 06, 2014 - 11:04 AM GMT

The market received a big jolt this morning. It came from the world of job creation. The market was expecting a decent report with 220k-230k jobs created. Also, there was the hope of a decent increase in hourly wages. A strong showing of some kind that the economy is hanging in there. The market was waiting and hoping that it wouldn't be a bad number since so many economic reports haven't been wonderful. Please, just no number that begins with a 1. Has to be a 2. The number was a 3. 321k to be exact. 100k more than expected. Wages also rose 0.4%, which was really good to see. Things are picking up. Well, at least for the past month.

You need to see consistent numbers month-after-month before you can take it more seriously, but at least the shock to the system was one that's good for the economy. More folks are feeling better about their situation. When jobs are better it's thought that the economy is improving, and thus, more folks will take loans. This bodes well for the financial stocks. Goldman Sachs Group, Inc. (GS), and the rest of the financial world are leading higher today. You want the heavily weighted stocks to lead and they did, but yet the market itself didn't do well. More on that in a bit. So the market was bifurcated. Some weak areas and a couple strong, especially the financial stocks and some of those airline stocks, which are taking advantage of the price of oil as it continues to plunge. Grinding is the best way to describe this market for now. Still fine but not blasting.

So let's talk about the financial stocks leading but the market grinding. These stocks are very heavily weighted. When they do well the market normally has a very hard time falling with any force. Consistent overall market down side action doesn't usually occur. That's what the market has going for it here as these financial stocks all had breakaway moves today on gap ups out of bases. Solid volume as well, thus, it's going to be hard to get them to fall more than a normal overbought pullback. The disappointment is the whole market not joining in to blast out and up. It wasn't bad by any means, but acted heavy. As if only the financial stocks were doing anything, and without them the market would have fallen. The financial stocks unable to carry everything up with them with force. It's not bearish by any means, but somewhat of a disappointment. Again, nothing bearish, but not wonderful. It says some scratch in the game remains fine, but don't over play things here as we watch to see if the market is readying itself to sell some. Also, and this is key, don't play areas of the market that are weak and struggling. Play the breakout stocks that are pulling back to support off of overbought short-term conditions. Financial stocks number one on that hit parade.

You have to be more alert as to where you place your dollars here. Many areas are not working. Old leaders such as technology giants Tesla Motors, Inc. (TSLA), Priceline.com Incorporated (PCLN) , Google Inc. (GOOG), and Amazon.com Inc. (AMZN) to name a few aren't working and haven't been for quite some time. Many of them are in bear markets on their daily charts with all the moving averages crossed bearish. The higher moving averages on top instead of the other way around which would be bullish. You want your 20's over your 50's, etc. Most of these technology stocks are inverse to that. The market demands more of your respect and focus with regards to where you enter trades. Be careful. 2050 on the S&P 500 remains the first critical level of support the bears need to remove. That's now the 20-day EMA. Keep it light and appropriate.

Have a nice weekend everyone!

Peace,

Jack

Jack Steiman is author of SwingTradeOnline.com ( www.swingtradeonline.com ). Former columnist for TheStreet.com, Jack is renowned for calling major shifts in the market, including the market bottom in mid-2002 and the market top in October 2007.

Mr. Steiman's commentaries and index analysis represent his own opinions and should not be relied upon for purposes of effecting securities transactions or other investing strategies, nor should they be construed as an offer or solicitation of an offer to sell or buy any security. You should not interpret Mr. Steiman's opinions as constituting investment advice. Trades mentioned on the site are hypothetical, not actual, positions.

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