Short Covering Rally Into September Unemployment Number
In this Show
In last night’s show I stated that I got a buy signal in the market late yesterday afternoon and that I was expecting the market to gap up. The market did gap up. Early in the morning the S&P futures were trading at 1929 and then at 9:00 they were trading at 1909. As I said last night I was not sure if the rally after the gap up would hold. By 10:30-11:00 the market started to deteriorate. At one point today the DOW was down over 200 points. At 1:37 this afternoon I stated that we would get an explosive short covering rally because tomorrow is the non-farm payroll unemployment number for September. From experience I knew that the market would have some type of short covering rally. The NASDAQ closed up on the day and the DOW closed down about 12. When I made the call for the short covering rally the S&P futures were trading at 1890. They closed around the 1917 level, an explosive rally.
The market is doing everything it can to hold off the 16,000 level and is also trying to find a bottom. I am hoping in the next 1-3 weeks we make a higher low on the DOW in the 15500-15900 range. Tomorrow is a very big number and I am waiting to see what happens.
Crude oil was up almost 2 dollars at one point today before wiping out the entire gain. It was even down on the day at one point with a low of 44.68. The key number is 44.14. If 44.14 is taken out on a daily closing basis oil will be in trouble. Oil is doing everything it can to not break this key number. I am on the sidelines until this number is broken or another pattern sets up.
Gold is significantly oversold on the daily charts. I am looking for another push back up. Gold went a little deeper than I thought but I still think the pattern is ok. I am looking for a pushup above the 1138-1148 range.