Weekend Charts and Chat. 6/7 June, 2020

Sat. a.m. 6/6/20. Surprise Jobs Report puts a rocket under U.S. Stocks.

In Australia yesterday:

Above is a 6-month daily chart of STW (ETF tracking the XJO). It shows the dominant trends since the advent of the CV-19 pandemic.

1. From mid-February to late-March, STW was in a distinct down-trend

2. From late-March till almost the end of May, STW entered a choppy period.

3. Since the end of May, STW has been in an up-trend.

STW is now approaching a major Gap Resistance Zone and above that is the 200-Day MA.

While the current trend continues up, it won't take much before it gets into the Gap Resistance Zone. We may see the STW (and XJO) pull-back or go into another choppy, sideways trend.

Overnight - Whooshka!

The Jobs Report was released at 8.30 a.m. New York, an hour before the opening. The market had plenty of time to digest the report and it opened strongly with a big gap up.


Dow Jones +3.15%. SP500 +2.62%. Nasdaq +2.05%. Small Caps +4.4%.

SP500:

Last night's big move up was accompanied by heavy volume, which usually means hidden sellers selling into strength. Expect some sort of pull-back or sideways action in the near future.

SP500 has been consistently closing above the 5-Day Moving Average for the past fourteen days. That's a fairly long run above the 5-DMA - another clue suggesting we'll see a slowing or pull-back in the index.

Commodities:

Enthusiasm in stocks carried over into commodities. Commodities Index +1.99%. Base Metals +1.14%. Energy +3.63%. Gold -2.03%. Gold continues to lose its safe haven status as stocks move higher.

Our market had a narrow-range, inside day on Friday. Given overnight action, it is highly probable we'll have a very positive day on Monday. Then we might start to look for signs of weakness.