Jobs continue to show optimism in the labor market.
ADP reported non-farm private employment rose by a seasonally adjusted 253,000 in May, well above forecasts that pointed to an increase of 185,000. While not the most accurate representation of the labor force participation rate, ADP’s report does add optimism to a skittish market.
SPY traded lower on Wednesday morning, then moved sideways for the rest of the day. 60 minute price action pushed back above the 9/20ema, towards the close, finishing the day at 241.44.
This morning SPY is trading at 241.80 in the pre-market session. A push above the upper trend line in the chart below would suggest bulls are still in control. Stochastic and RSI are rising.
Institutional trades – Blocks
Blocks taper off markedly, above the 241.80 zone, so any foray into these levels could add fuel (short covering) to the current 9 day trend.
Winning stock picks on the watch list are performing well. We will consider adding to winning positions, that break out or find buyers at the 9ema on pullbacks.
Sector rotation would certainly favor a continuation of the current trend as well, so watch those sectors that saw buyers step up mid-day Wednesday. Industrials, materials, consumer discretionary and technology are all working hard. Semiconductors continue to outperform.
Happy Thursday,
Vinny