S&P 500 Testing Important Level As Friday’s Jobs Report Looms

All eyes will be on this week’s monthly labor report. The jobs report, which is due to be released Friday at 8:30 am ET, may impact the outcome of the Fed’s December meeting.

bloomberg business economic calendar week of november 2

Friday’s non-farm payrolls (jobs report) will also impact how the major indexes, especially the S&P 500 Index (INDEXSP:.INX), act near areas of possible resistance. Any price action prior to the jobs report will likely be confirmed or tested after the release.

As always, we’ll await the weekly close.

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s&p 500 chart technical resistance breakout level november 3

Is The Bigger Picture Starting To Favor Lower Lows?

This week’s stock market video looks at the market’s current risk-reward profile in the context of last week’s weak close, along with areas of possible resistance. The video also compares similarities and differences between the S&P 500 in 2011 and 2015.



Dow Jones Industrial Average Also Near Important Level

Like the S&P 500, the Dow Jones Industrial Average (INDEXDJX:.DJI) is near a possible inflection point. Stock market bears prefer to see the index rejected near the upper downward-sloping blue line. Stock market bulls are pulling for the “breakout” scenario this week. A breakout appears to be underway, but with the monthly jobs report out Friday, we’ll watch the weekly close

dow jones industrial average resistance level november 3

Investment Implications – The Weight Of The Evidence

There are three major scenarios facing the stock market:

  • Rally on to new highs.
  • Pullback, then rally to new highs.
  • Weakness carries stocks to new lows.

Based on the facts we have in hand today, the higher probability outcomes appear to be 1 and 2 above. While the new low scenario’s probability is not zero, the weight of the evidence tracked by our market model favors bullish outcomes looking out several weeks/months. The previous sentences are subject to change if the data begins to deteriorate; something that has not happened yet in a meaningful way.

Thanks for reading.


Twitter:  @CiovaccoCapital

Read more from Chris on the CCM blog.

Author or his funds may have a long position in related securities. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.