NYMO shows breadth improving this week as it prints higher highs and the moving average clearly bottoming. With the first half of August statistically leading to a positive return and the second half of the month with a negative return we need to monitor stocks closely for weakness over the next 5 trading days. If any weakness appears, we will most likely reduce our exposure into next Friday.
Zweig breadth thrust indicator has been improving as well, along with bullish readings in A50R (the number of stocks above the 50d moving average). A50R is rising to 61% for S&P 500 and the Nasdaq. Advancing stocks are also beating decliners this week, with a modest rise in the NYSE indicator (NYAD) and Nasdaq (NAAD).
8:30 AM Unemployment Update: US Payrolls increased to 943,000 vs. estimates of 870,000. Unemployment 5.4% vs. 5.9%. Manufacturing payrolls rose 27,000 in July. Private payrolls rise 703,000 in July. Average hourly earnings were inline. Futures are slightly lower on the news.