Weekly S and P Report Comments

by Sean Lusk, PFGBEST

1-877-294-7757

slusk@PFGBEST.com

Friday, February 03, 2012 at 4:38 PM

E Mini S&P settles 1339.00 up 26.50

For the week ended (1/30-2/3)

Stock futures surged after the U.S. economy added more jobs than expected last month, pushing the NASDAQ composite to an eleven year high and pushing the Dow within reach of its highest reading in almost four years. The mini Dow futures rallied 127 points or 1.2 percent today, its highest close in 2012, and to its highest level since May of 2008. The mini S&P 500 added over 16 points in trading today, making new highs for 2012, for a 1.6 percent daily gain and fifth straight weekly gain. The mini NASDAQ gained 32 points  and is off to its best start since 1991. Nine out of the ten S&P 500 sectors rose Friday, with financials and consumer discretionary stocks leading the way. Friday’s gains followed a strong report from the U.S. Labor department. January data showed non-farm payrolls rose 243K last month, marking the biggest gain since April. The jobless rate fell from 8.5 percent to 8.3 percent, the lowest it has been since February 2009. Stocks popped higher after the report and stayed that way the rest of the day, posting a high of 1342.00 in the mini S&P in the last half hour of trading. The payroll number today of 243K, beat even the most bullish of estimates, as most economists had the rate staying put at 8.5 percent and the non- farm number at plus 150K. Meanwhile, the U.S. nonmanufacturing sector expanded at a faster rate in January, according to data released Friday by the Institute for Supply Management. Factory orders came in lower than expectations, rising for the second straight month by 1.1 percent, though unfilled orders, a sign of future demand, surged 1.4 percent, the biggest gain since March 2008. European markets rose on encouraging economic data. The Stoxx Europe 600 rose 1.7 percent, closing at a six month high. The euro-zone composite purchasing manager’s index confirmed private-sector activity expanded in January, with the index rising 50.4 from 48.3 in December. 

January’s surprisingly strong jobs report, showing gains across a range of industries, is an encouraging sign that the employment picture might be picking up, and that first quarter growth forecasts, may be too low. It also raises questions about the timing of the Federal Reserve’s pledge to keep interest rates low, and whether another round of quantitative easing is even necessary. Traders are also questioning whether the Fed will wait until 2014 to raise its target rate, as it has forecast. In fact St. Louis Fed President came out today and said the Fed may have to raise rates before 2014. He called recent economic data “surprising to the upside” and noted that the unemployment rate likely is to fall to 7.8 percent by year’s end, and may decline to 7 percent by the end of 2013. Despite today’s positive news, the market still faces headwinds particularly from the EU. Greek PM Papademos says debt talks are in the final phase, but has repeated this “final phase” for the past two weeks. There are whispers that EU officials are actually preparing for an orderly Greek default rather than receive another tranche, ($ 20 billion bailout). As German Finance Minister Wolfgang Schaeuble said yesterday “We can’t continue to pay into a bottomless pit”. Investors should stay tuned. My swing numbers for next week come in as follows for the mini S&P 500. Support comes in first at 1325.00 and then below at 1309.50. A close below here look for 1279.75 as the next level down. Resistance comes in at 1355.50 and then up at 1371.75. Please call me at anytime with any questions or comments.

Daily Swing #s ESH2 (2/6)

R2-1355.00

R1-1346.00

Pivot-1333.00

S1-1324.00

S2-1311.00

Weekly Swing #s ESH2  (2/6-2/10)

R2-1371.75

R1-1355.50

Pivot-1325.75

S1-1309.50

S2-1279.75

Daily Swing #s YMH2  (2/6)

R2-12945

R1-12869

Pivot-12757

S1-12681

S2-12569

Weekly Swing #s YMH2 (2/6-2/10)

R2-13057

R1-12924

Pivot-12700

S1-12567

S2-12343

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