Stock Market Early Morning Insights – October 7, 2016

Another month has passed and it is once again employment report day. There will be the usual market gyrations when the numbers come out it 7:30 AM central time, and then maybe we will get a better idea of the direction of the indexes going forward.

The NASDAQ composite, the S&P 400 mid-cap and the S&P 600 small cap indexes all show buying once again at the end of the day. It’s a common theme to sell off early, and then close near the intraday highs. This is a constant source of frustration for the shorts and for those who think the indexes have to collapse one of these days. All of the indexes generated a test for supply flag yesterday which tells us that selling was limited on light volume.

Semiconductors stocks led the market yesterday as they have many times during this rally which began in late June. The indexes have stalled the past couple of months, but the Semiconductors Devices and Semiconductors Manufacturing continue to be two of the leading groups. Until these two groups roll over, I believe the indexes will continue to have an upward bias.

Accumulation remains strong for the industry groups with 50% of the groups following into either A or B accumulation. This compares to 28% of the groups belonging to the D and E distribution categories. The top 50 GIR is dominated by Semiconductors, but there were other pockets of strength. Homebuilders were up for the day along with Banks, Communications Equipment, and Exploration and Production stocks. On the downside, REITs and precious metals and mining stocks seem to be the biggest losers.

There really isn’t much to discuss until we see how the markets trade after the jobs report. The next big concern, is of course, the presidential election. Because of the choppiness of the market, I am taking very few trades but at the moment. Capital preservation is paramount.

Have a good weekend.

STOCK MARKET EARLY MORNING INSIGHTS

Stock Market Early Morning Insights is a product of Ron Brown Investing. The complete report and all the charts are produced daily before the market opens and distributed by email to subscribers. Reports published on the HGSI Blog are delayed and do not contain all the charts.  For more information about subscribing use this link. MORE INFO