Waiting on the Jobs Report
By Paul Cherney
The September Employment report is due at 8:30 a.m. ET Friday. The Street expects a decline of 20,000 to 25,000 in nonfarm payrolls and an unemployment rate of 6.2% vs. August's 6.1%.
There is so much anticipation of good earnings to be announced later in the month, that even a "bad" employment report, meaning nonfarm payrolls down over 75,000 and an uptick in the unemployment rate to 6.3% or higher, that the selling might turn out to be a short-lived event lasting at the most two or three trade days.
There is even a possibility that a modestly bad report (nonfarms down 50,000-75,000, unemployment rate 6.3%) could ignite a bout of selling which serves as a short-term capitulation of sellers that could lead to an intraday reversal.
Thursday's reaction to weaker than expected August Factory Orders data suggests that there is an underlying bullish sentiment in place (because markets did not sell off after the weak report).
These markets look like they want to go higher, but there are probably plenty of people who will wait until Friday's report because it still has the potential to generate selling, even if it is just a short-term event sparked by short-term profit-taking.
Immediate Nasdaq resistance is 1,827-1,856.12; resistance becomes thick with prints of 1,835 and higher. The Nasdaq has a focus of resistance at 1,845-1,856.12. The next big layer of resistance is 1,867-1,913.
The S&P 500 is inside immediate resistance at 1,014-1,026, with a focus of resistance at 1,018-1,023. The next layer of resistance is 1,032-1,041 with a focus at 1,035-1,041.
Immediate intraday support for the S&P 500 is 1,015-1,08. Additional supports are 998-988 and 991-983, which makes 991-988 a focus of support.
Immediate intraday support for the Nasdaq is 1,822-1,809. Additional supports are 1,791-1,770 and then 1,765-1,737 with a focus at 1,757-1,752.
Cherney is chief market analyst for Standard & Poor's