Friday, February 7, 2014

Bad jobs report means market goes up

Ritholtz already pointed out this morning that the BLS is generally a worthless piece of data, at least when taken in isolation. And I'm sure people have spun the numbers this way and that in the media so far this morning.

But the chart is the chart, and all this blather in the media is meant to do nothing but explain why the chart is doing what it's doing. So let's ignore the media for a sec and just look at the chart:

At the very least, the SPY is moving back to the top of a downward channel. anything better than 1786 by the end of today is bullish. Even better, if this situation holds, the weekly chart will show a fakeout at the weekly supporting EMA, which invalidates this entire week's selling.

Oh look, the MACD is crossing up too. TAs seem to think that means something.

And here's the Nasdaq 100:

It's already opened above its short-term EMA, and the weekly chart fakeout candle thing still applies.

Meanwhile the $VIX is at this second down to 15.80, which is at the Bollinger mean and below its own EMA(16), so it looks like buying downside protection is so yesterday.

So it doesn't matter what the BLS said. What matters is that people are buying the market back up.

We'll see if it holds. But while it's fresh in your mind, perhaps you should go right now and make a list of the people who've spent this entire week warning you that a 20% correction is imminent and 2014 will be a wash and you should get out of the market. Because quite plainly, the chart is the chart, and the chart is starting to suggest they were all wrong, no?

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