By Markus Heitkoetter
Last week, traders were waiting for the Unemployment Report that was released on Friday.
And the jobs report was right in line with expectations:
In April, the US economy added 223,000 jobs while the unemployment rate fell to 5.4%, the lowest rate since May 2008.
Following this report, the markets were rallying.
The Dow surged 267 points (nearly 1.5%) in afternoon trading Friday, closing at 18,191.22. That’s one of the best trading days of the year.
The S&P 500 and Nasdaq indexes are also ended more than 1% higher.
The euphoria in the markets comes from signs that the U.S. economy is rebounding this spring much like last year. The economy continued to add a very healthy number of jobs — 223,000 — in April. Anything over 200,000 is considered robust.
So what’s next?
This week forward, investors will be looking for the U.S. stock market to have a “break-out” moment. Since the beginning of the year, the markets have been moving sideways. And there haven’t been as many record-setting days this year compared to last year. The general consensus is that the big rally is running out of some steam.
The bull market is now the third-longest in U.S. history. While markets don’t die of old age, the risks are certainly rising, especially as the Fed prepares to raise rates.
So will we finally see a breakout to the upside this week? Or will the markets continue to move sideways?
This upcoming week there aren’t many reports on the economic calendar that could move the markets.
And without any major events we might remain in this holding pattern.
Boeing Company (BA) made an impressive push higher on Friday, ending the day with a 2.81% gain. The move was another example of how profit targets can be a big help when stocks are turning on a dime.
A PowerX Method Sell Signal was identified on April 24th. Last week an ADR Profit Target at $141.50 was met days before Friday’s rebound. We’ll now wait for all 3 PowerX indicators to be in sync to confirm the next trend.