Major averages rallied on higher volume. The QE printing press rolls on. The market has shown resilience in the face of North Korean news. Helping the rally, Treasury Secretary said the White House has a "very detailed" tax plan ready that will be released to the public by the end of September. Despite the stronger-than-expected GDP of 3% vs. est 2.7%, the implied probability of a December rate hike now sits at 36.4%, slightly lower than where it stood at this time last week (38.7%). This seems to suggest all is still unwell economically speaking as the Fed may decide to delay any further rate hikes to 2018.
August nonfarm payrolls came in at a weak 156,000 vs. est 183,000. The prior month's reading was revised to 189,000 from 209,000. Nonfarm private payrolls added 165,000 vs. est 173,000. The previous month's reading was revised to 202,000 from 205,000.
The unemployment rate rose to 4.4% vs. est 4.3%. Average hourly earnings increased 0.1% vs. est +0.2%, while the previous month's reading was left unrevised at 0.3%. The average workweek was reported at 34.4 vs. est 34.5. The previous month's reading was left unrevised at 34.5.
Gold continues to rise having recently broke out above 1300. Gold has been trending higher over the last several weeks as it is known as a safe haven during times of uncertainty. The situation with North Korea as well as the tenuous economy and the sovereign debt bubble which continues to grow all contribute to the gold "fear" trade.
Focus List Notes:
Most names on the list are not in lower-risk long entry positions at this time. Watch for constructive pullbacks in names like NFLX and EA, for example, into areas of logical support.
VRTX posted a second pocket pivot yesterday after Wednesday's initial pocket pivot. The stock briefly pulled into its 10-dma yesterday morning, giving members an opportunity to take an initial position while using the 10-dma as a tight selling guide.
With the market rallying, TSLA continues to look more like a long than a short as long as it can hold above its 50-dma. Watch for any constructive test of the 50-dma as a potential lower-risk long entry, while a clean breach of the line would bring the stock back into play as a short-sale at that point.
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