Digesting, While Waiting for the Jobs Report
Indices went their own different ways. Large caps gained, while the riskier Small caps and the technology driven NASDAQ sold-off slightly. An important jobs report is due out tomorrow morning. It is likely to provide further market direction.
Our Market Breadth Index, the $VMBI, is continuing to show strongly bullish readings. We see no signs of weakness yet in the general markets.
Treasuries gapped below the 20 eMA and lost almost 1 percent. A good jobs report would likely cause further selling and a re-test of the December low is likely. While a miss on the jobs report could catapult TLT over the recent highs and extend the rally.
Emerging markets may have finally turned around. EEM closed above its 200 day moving average (DMA). Should this breakout hold, EEM is likely to gain at least 7 percent in the short term (based on the measured move from February 1st.)
Gold is showing signs of strength again. A close above $1361.80 would likely extend this rally to over $1400.
GDX seems to have rebounded. A close above $26.95 would continue the rally by at least 4 percent (measured move from February 28.
IYR is barely holding the gap up from 2 days ago. A break below gap resistance could cause selling to the 50 DMA.
Oil rebounded from the 200 DMA. We are neutral on oil at this point. A close below 200 DMA could trigger a re-test of January low. While a close above $105.22 could continue the rally.
We are long: GDX, IYR, TLT, EEM, DVY, ETV