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Buyers Shrug off Disappointing Jobs Numbers

Jobs numbers on Friday did not confirm more positive readings, which had caused the market to rally on Wednesday. However, buyers stepped in last week, buying up the major indices past their resistance levels. The key point here where fundamental data are concerned is it matters much more how the market reacts to the data than the data itself. Buyers have proven themselves intent on buying this market even if the jobs numbers aren't encouraging.

We have recently discussed the fact that the market needs a follow through day in order to give us the all-clear sign to get aggressive on the buy side again. Stepping back and looking at the market's recent correction, however, reveals that the market did not in fact correct, but rather experienced only a minor pull back in the uptrend, which started early September.

Pull backs don't need confirmation days, so while low volume is troubling, price action in the leadership group and the major indices themselves indicate that the market is going to keep churning higher. Low volume may eventually lead to a failed move, but unless the market's dynamics change (leadership strength and higher overall price action) it wouldn't surprise us to see the market rally into the end of the year. This is, after all, a traditionally bullish season we have entered.