Impressive Rebound…But will it Last?

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What a market, at around 5am the ES S&P 500 Futures bottomed out at 2057 only to go as high as 2088 today.  A recovery of more than 30 points.  Quite impressive and has a lot of traders scratching their heads I am sure.  In my humble opinion, this is merely a strong counter trend.  A trap for the bulls.

Looking at the chart we have a lower high and a lower low on the S&P daily which may signal a trend change to the down side.  Other than February the market has been very volatile this year.  Particularly since late March were it has barely strung 2 positive days together with only mini swings as it ground higher to a new All Time High.

I think the chance of seeing a new high in the market now are very slim.  As always, don’t trade opinions, only trade price.  I am currently in cash, but in the unlikely event of it breaking higher I will no doubt be a buyer.  Just a cautious one.

Tomorrow the focus is the 8:30am release of the jobs report.  Expect some volatility there, expectations are pretty high this time.

Market News:

U.S. equities traded higher on Thursday as investors awaited Friday’s jobs report and yields eased slightly from recent highs.

The Dow Jones industrial average briefly gained more than 100 points but remained below the psychologically key level of 18,000. The Nasdaq also held below 5,000. The S&P 500 attempted to break initial resistance at 2,093, a level highlighted by BTIG’s chief technical strategist Katie Stockton.

Thursday’s gains marked a rebound from the last two days’ selloffs in both the bond and equity markets.

Friday’s Jobs report:  Analysts polled by Reuters expect Friday’s report to show the creation of 224,000 jobs in April, with unemployment lower at 5.4 percent.

Initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 265,000 for the week ended May 2, the Labor Department said on Thursday. Claims for the prior week were unrevised at 262,000, which was the lowest reading since April 2000.

Friday:

Earnings: Toyota, JD.com, BioCryst Pharma, Liberty Media, AOL, Health Care Reit, NRG Energy, Sirona Dental Systems

8:30 a.m.: Employment report

10:00 a.m.: Wholesale trade

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