Market Lab Report - Premarket Pulse 10/5/15

Published : October 5 2015 at 8:46 ET
Major averages gapped lower on Friday's weaker than expected payrolls report, then climbed higher the rest of the day to finish strongly to the upside on increased volume. The majors, however, are still under critical moving averages and, as we have mentioned, investors should expect heightened levels of volatility. Thus Friday's positive action will not necessarily lead to a resumption of any uptrend as seemingly positive action following the Flash Crash in 2010 and the steep correction in mid-2011 resulted in retests of lows. However, within the context of an overall bearish consolidation following the "Capitulation Monday" lows of late August, a rally up towards the 50-day moving average in any of the indexes would not necessarily be surprising. As always, we let the stocks guide us in terms of how bullish or bearish we become.

CME FedWatch puts the odds of a rate hike when the Fed next meets on October 28 at just 7%. December 16 is not much better at 29%. Thus, it is probably safe to say that the Fed will not be hiking rates this year, despite what Chairperson Yellon said earlier. We must remember the Fed is tied to the government so anything they say is designed to soothe markets or talk them higher.

Futures are up on improving commodity prices. European markets are higher by more than 2%.

This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.