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Stocks rally on jobs report

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Stocks opened higher on Friday after a better than expected jobs report. The Dow gained 118-points, or about 0.5%, while the S&P 500, Transports, and Nasdaq produced similar gains. A temporary continuing resolution to avoid a government shutdown was passed after the close on Thursday contributed to the rally.
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The 228,000 jobs added in November was higher than expected helping stocks, particularly large caps, to another round of buying. If we look at it from the glass being half empty side there were some negatives as tech and small caps (Russell 2000), although ending the day with some gains, closed near the lows of the day reversing earlier gains so the broader market wasn't quite as bullish as the major indices might suggest.




The European markets, which looked on the verge of breakdowns, showed life on the release of the jobs report, so we'll see today (Monday) if those gains can hold since we saw profit taking in some U.S. indices after the European markets closed.

This week is the 2-day FOMC meeting and investors are expecting a rate hike announcement on Wednesday, so it's the guidance for future action that investors are interested in and could be the market mover.



The SPY (S&P 500 / C-fund) rallied and closed at the highs of the day, and at the all-time closing high. There is some intermediate-term resistance, although it is rising, near 266.




The small caps / S-fund rallied early after the jobs report but faded as the day wore on. The 0.31% gain adds to your account if you're in the S-fund, but that weak close, seen more profoundly on the Russell 2000 chart posted above, may be an obstacle to start the new week.




The Nasdaq also pulled back closing well off the highs, so there was some profit taking where the bulls might prefer to see another test of the recent highs.




The EAFE Index (I-fund) was up, creating another open gap. We've seen a few of the old gaps get filled and now there's two that look ripe for the filling.




The AGG (Bonds / F-fund) was down on Friday and remains in the pennant formation but there are a couple of other formations that may prove to be meaningful like the breakdown from the blue rising wedge.




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Thanks for reading. We'll see you back here tomorrow.

Tom Crowley


Posted daily at www.tsptalk.com/comments.php


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