Sunday, February 5, 2012


New unemployment claims in the U.S. fell to a lower level than most experts had expected according to figures released by the Labor Department. For the week ending January 28, the DOL reported a seasonally adjusted level of 367,000 initial claims for unemployment. That marks a decrease of 12,000 from the previous week's revised figure of 379,000 - slightly higher than the 377,000 initially reported. graphs - RTTNews

Payrolls expanded by much more than economists had predicted in January, while the unemployment rate declined. The U.S. economy added 243,000 jobs in January, according to statistics released by the Department of Labor on Friday. Economists had expected an increase of 135,000

The report showed that the unemployment rate came in at 8.3 percent. Economists were looking for the jobless rate to hold steady at 8.5 percent

The Institute for Supply Management-Chicago Inc. said this week its business barometer declined to 60.2 from 62.2 in December. Readings above 50 signal growth. Economists forecast the gauge would rise to 63.

Orders to factories rose in December, supported by a rebound in business investment in capital goods. In addition, service companies grew at the fastest pace in 11 months in January as companies started hiring to keep up with rising demand. Factory orders rose 1.1 percent in December after gaining 2.2 percent in November, the Commerce Department reported Friday. For the year, total orders were up 12.1 percent after a gain of 12.9 percent in 2010.

The Institute for Supply Management said Friday that its index of non-manufacturing activity jumped to 56.8 percent in January from 53 percent in December. The survey's employment index soared to its highest level since February 2006. Any reading above 50 indicates expansion.

Friday, the Labor Department reported that nonfarm payrolls (jobs) increased by a significant 243,000 in January. This chart provides some perspective on the US job market. Note how the number of jobs steadily increased from 1961 to 2001 (top chart). During the last economic recovery (i.e. the end of 2001 to the end of 2007), job growth was unable to get back up to its long-term trend (first time since 1961). More recently, the number of nonfarm payrolls has been working its way higher but at a pace that is not fast enough to close the gap on its 1961 to 2001 trend. In fact, the current number of US jobs is still below its 2001 peak.

This past week's top sectors.

This past week's indices - the small caps gained the most.

The monthly charts are still looking quite bullish. The NASDAQ has broken to multi-year highs, the Dow not far from moving towards that 13,000 mark from 2010. If it breaks to the upside there it could also eventually test the 2007 highs at 14,200. The S&P 500 needs to move over 1380 and the Russell 2000 is nearing its all-time highs as well.

On the 60 min chart we see how bullish the indices have been, breaking out over the top band, going sideways and then running back up to it again. It is very bullish when they push the bands up in this way and you want to see that the Center Bollinger band holds on pullbacks.

A standalone view of the Dow monthly chart and the overhead challenge towards the 2007 high.

The weekly chart shows it just moving back inside the ascending parallel channel.

The daily shows how close it is to closing over the 2010 highs. The MACD is flattening out and the histogram rather flat. The RSI is close to overbought territory but when it made its 2010 high it was a bit over 70.

The 10 min renko chart shows the steep move up at the start of the day on Friday when the jobs report numbers came out. Then it stayed flat for most of the day.

There are two sets of Fibonacci projections on this two-day-per-bar Dow futures chart. The first projection based off the last dip had a 161.8% target that was reached on Friday. The longer term projection is based from the 2011 low and has the first 127.2% target at 13,313.

A closer view on the 120 min chart shows that big move and the breakout of trendline Friday morning and how the Fibonacci level was also R3 pivot and both together gave too much resistance to allow it to move higher

The transports moved up only half a percent this past week, still well under the top weekly Bollinger band.

Utilities stayed in a tight range right on dual moving averages.

The black chart monthly view of the NASDAQ showing that December volume was up over the November volume. It was not by a lot, but enough to help it along to close in this new territory by a bit.

And the weekly chart shows it about midway inside the parallel channel so plenty of room to move for a while. It is short term overbought but RSI also has room to run.

The moving average of number of new high son the Nasdaq made an impressive run to and slightly over the peak it hit in July. This is just what you want to see in a bull market.

The NASDAQ summation index is now almost 100 points away from its five day EMA as the index rapidly moved to new high levels.

The NASDAQ 100 closed right at the top Bollinger band So a bit of a pullback this week could be expected. You can see it's rapid rise this year has basically been pushing that band up. At 78 the RSI is short term overbought.

The daily NASDAQ 100 futures with two sets of Fibonacci projection levels both short and longer-term.

The volatility index closed the week at 17.

The semiconductor index is back over the trendline and shorter-term horizontal resistance.

The moving average of the number of new highs minus new lows on the NYSE (lower section) continued to climb and very near former resistance from February of last year. The NYSE itself however has broken above resistance.

89% of all stocks on the NYSE are now trading over their 50 day moving average. This is quite bullish though it is at levels where we often have begun some pullback in the past but it has can remain above these levels for a month or more.

The lazy S&P 500 is 136 points above the last buy and within pennies of the 1345 resistance level. RSI on this weekly chart is only at 61 so it has room to run.

The weekly chart shows it closing at its high and right at former resistance.

Here a closer view on a daily chart and you see it at the top Bollinger band with RSI over 70. Putting it in overbought territory short term.

On the 60 min chart RSI is also high but medium term it is only at about the center of this ascending parallel channel.

The S&P 500 ETF 2X long dipped to sell and below the channel for a couple of days and then switched back to a buy for February.

The S&P 500 futures chart showing both longer and short term Fibonacci projection levels if it breaks over the the 1357 resistance.

Here a 120 min chart with its move to R3 Pivot on Friday, which coincided with this 127.2% projection. In this timeframe, we see the 161.8% just over 1350.

The standalone Russell 2000 monthly chart showing its current relation to its all-time high set in 2011. The histogram in this timeframe is still slightly negative and the MACD is just about to cross over bullishly. If those happen, this could start a larger move on a breakout above the all-time high.

On the daily chart we see the close over the top Bollinger band with RSI over 70 so a candidate for an overbought pullback.

The move on Friday brought the Russell back up and over this 60 min parallel channel it has been in since mid December. Note that it also took it very close to the measured move of the inverse head and shoulders we pointed out in December

The 15 min Russell 2000 faster to respond, had a crossover on its MACD and RSI dropped back under 70 by the close on Friday.

The 3X bullish ETF for the Russell broke above its ascending parallel channel and moved to a secondary one above which was also at the R3 Pivot Friday its RSI remained at elevated levels at the close.

The retail sector ETF continued its move higher closing at its high for the week.

The banking sector got a boost this week, moving over resistance as shown. This pattern shows a possible resistance projection at 48 at the 161.8% projection.

A closer view of the breakout on Friday as it moved up over 3%.

The 10 year treasury note yield moved up strongly on Friday closing at the 50 day EMA - yield of 1.94%.

The Dow Jones world market index gained 2.4% for the week and above horizontal resistance.

The emerging market ETF also closed well above resistance as a continuation from last week's move over the 50 week EM a.

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