Major averages moved fractionally higher yesterday on mixed volume with the S&P 500 logging a third accumulation day since its weak follow through day on Jan 26. Leadership, however, remains scant. The market continues its struggle in finding direction.
On weekly charts, both the NASDAQ Composite and the S&P 500 Indexes are forming what appear to be three-week bear flags after rolling over in January. This may portend further downside to come.
That said, while MDM remains on a solid sell signal as further evidence accrues of the downtrend being intact, VVM (VIX Volatility Model) may switch to a sell signal (market moving higher) if it senses a brief window of opportunity on the upside. VVM is more sensitive to subtle, short--term changes in market direction than is MDM, and since VVM deals with volatility-based ETFs, sharp intraday moves can occur.
Today's BLS labor report came in mixed, with average wages higher, unemployment at the lowest rate in 8 years down to 4.9%, but the economy only added 151,000 non-farm jobs below the 180,000 expected.
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