News of a debt-ceiling deal in Congress helped send the major market indexes gapping higher on Thursday morning, ahead of Friday’s jobs number. But the rally faded into the close as the S&P 500 Index reversed from a point near its 50-day moving average and closed near its intraday lows. On Friday, the market ran around like a chicken with its head cut off following a surprisingly weak Bureau of Labor Statistics jobs report of 194,000 new jobs vs. expectations of 450,000 and whisper numbers of 750,000 or higher.
By the close, the S&P and Dow were both in the red as a move into positive territory earlier in the day faded into Friday’s close. For now, the 50-day line serves as resistance for the S&P while we have key lows to keep an eye on from August and September. These can be thought of as undercut & rally (U&R) lows with the idea that any break below these lows would be bearish.