Grandpa Russell (IWM) Awakes

Equities markets put in a respectable week as Fridays action turned things around from what was looking like a key reversal pattern. IWM was up almost +2% on Friday and +1.4 % on the week.The catalyst was the jobs report which was very strong, showing that unemployment is the lowest it’s been in 49 years at 3.6%. For those that think the glass is always half empty, wage growth was anemic. Classic analysis regarding employment would take these numbers as a strong positive, reducing the chance of a recession although the bond markets didn’t seem to care and barely budged.

This week’s highlights are:

  • Risk Gauges are still strong but retreated from a 100 % bullish reading
  • High Yield Debt is having issues relative to US government debt
  • Small Cap (IWM) Stocks came alive clearing the 50 Week Moving Average for the first time in 6 months
  • Regional Banks moved up and cleared its 200 DMA
  • Fed minutes indicate that it is open to anything as its all about the data (a possible rise?)
  • Market Internals stabilized after showing topping action

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