The Gilmo Report

February 5, 2017

February 4, 2017

Friday’s jobs number came in at a “blistering” 227,000 jobs vs. estimates of 177,000, sending the market blasting back to the upside. The Dow Jones Industrials Index regained the magical 20,000 level and the NASDAQ Composite logged a new all-time closing high.

Despite the strong index action on Friday, the action among individual stocks has been mixed. Unless something is gapping up on earnings or staging some sort of wild upside reversal after selling off, most stocks appear to be moving to and fro without making any substantial upside. There are a few exceptions, but only a very few. Friday’s rally was led by financials, many of which were looking quite negative on Thursday. One example would be Charles Schwab Co. (SCHW), which gapped down through its 50-day moving average on Thursday on heavy selling volume.

It then rebounded on Friday on news regarding the peeling back of Dodd-Frank, along with other financials. However, note the stalling action at the 50-day line. In my view, this thing is a short right here using the high of Friday at 40.68 as a guide for a tight upside stop.




Goldman Sachs (GS), on the other hand, blasted through its 50-day moving average on a strong-volume gap-up move on Friday. This would qualify as a pocket pivot coming up through the confluence of the 10-day, 20-day, and 50-day moving averages on big buying interest.

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