As expected a relief rally ensued, however, I’m cautious about this initial boost. I think we will see further weakness early next week before we can move higher. It was just a little too whipsaw like for my liking.
So while I think the majority of the drop is over and a new wave higher is about to start, I think we need to see what happens on Monday before I am ready to commit any capital to this latest euphoric upturn, as according to my system, the downtrend is still in place.
U.S. stocks surged on Friday, with the Dow industrials jumping 200-plus points, after a better-than-projected payrolls report bolstered a positive view of the U.S. economy.
The government reported the U.S. jobless rate fell to 5.9 percent in September and companies added 248,000 in payrolls after a 180,000 hike the prior month, more than previously estimated.
Other economic reports had the U.S. trade deficit unexpectedly narrowing in August as exports climbed to a record.
And the Institute for Supply Management said its service index fell to 58.6 in September from 59.6 the month before, with last month’s reading better than the expected 58.5 estimate.
News Sources: CNN Money & CNBC